[Federal Register Volume 69, Number 62 (Wednesday, March 31, 2004)]
[Notices]
[Pages 16990-16998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-7144]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49465; File No. SR-Amex-2003-89]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendments No. 1, 2, 3, 4, 5 and 6 Thereto by the American 
Stock Exchange LLC To Implement a New Options Trading Platform Known as 
the Amex New Trading Environment or ANTE

March 24, 2004.
    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 October 7, 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. On 
November 17, 2003, December 17, 2003, February 9, 2004, March 2, 2004, 
March 18, 2004, and March 24, 2004, the Exchange submitted Amendments 
No. 1, 2, 3, 4, 5 and 6 to the proposed rule change.\3\ 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 letters from Claire P. McGrath, Senior Vice President 
and Deputy General Counsel, Amex, to Nancy Sanow, Assistant 
Director, Division of Market Regulation, Commission, dated November 
14, 2003 (``Amendment No. 1''); December 16, 2003 (``Amendment No. 
2''); February 5, 2004 (``Amendment No. 3''); March 1, 2004 
(``Amendment No. 4''); March 17, 2004 (``Amendment No. 5''); and 
March 23, 2004, replacing Form 19b-4 in its entirety (``Amendment 
No. 6'').
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to adopt new rules for the implementation of 
its new options trading platform known as the Amex New Trading 
Environment or ANTE.
    The text of the proposed rule change, as amended, is available at 
the Office of the Secretary, the Amex, at the Commission, and on the 
Commission's Web site.

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, as 
amended, 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
    The Exchange proposes to implement a new trading environment 
(referred to hereinafter as ``ANTE'' or the ``ANTE System'') to replace 
many of its existing floor trading systems. Initially, ANTE would be 
used for the trading of standardized options on the Exchange, but would 
be expanded to include all of the Exchange's current and future product 
lines--Exchange-Traded Funds, equities and single stock futures. The 
Exchange seeks the approval of new rules and the amendment of current 
rules to implement ANTE in options only. However, additional filings 
would be submitted to the Commission when the Exchange seeks to expand 
ANTE to other product lines. ANTE is designed to be an integrated, 
scaleable, easily configurable system that is being developed to meet 
current and future competitive and economic challenges. The Exchange 
believes that ANTE has been designed to replicate and improve upon many 
of the processes and procedures currently in place on the trading floor 
today. The ANTE System would replace many of the Exchange's current 
systems, including the automated quotation calculation system and 
specialist ``book'' functions such as limit order display, automatic 
order execution and allocation of trades. Each floor participant would 
have electronic access to the ANTE System: floor brokers would access 
the ANTE system through the Booth Automated Routing System (``BARS''); 
specialists would access the ANTE System through the Central and 
Display Books--providing the functions of the quote calculation system 
(known as ``XTOPS'') and the Amex Options Display Book (``AODB'') in 
one integrated system; and registered options traders would access the 
ANTE System through a handheld device.
    The functions currently available in the AODB would be split 
between the ANTE Central Book and the ANTE Display Book. The Central 
Book would contain what was formerly known as the ``specialist's limit 
order book'' and would provide for the matching and execution of 
eligible orders similar to the current Auto Match and Auto-Ex Systems. 
The Display Book would be similar to the ``Acknowledgement Box'' 
currently found in the AODB and would contain orders awaiting manual 
handling. Registered options traders would be able to view both the 
Display Book and the Central Book on their hand-held devices, giving 
them a complete view of the limit order book and all pending orders in 
each option series they trade. Market and marketable limit orders 
routed to the Exchange would be sent to either the Central Book or the 
Display Book based on whether the size of the order is within the size

[[Page 16991]]

eligible for automatic matching in the Central Book (referred to as the 
``auto-match size''). The Options Trading Committee would establish the 
auto-match size for each option class.
    Similar to the Auto-Ex sizes in use today, the auto-match size 
would be the maximum order size that could be routed to the Central 
Book for automatic matching with orders on the book or the disseminated 
quote. An order greater than the established auto-match size would be 
routed to the Display Book for an immediate execution by the 
specialist, at the disseminated price, up to the disseminated size. 
Market and marketable limit orders less than or equal to the 
disseminated size and less than or equal to the auto-match size would 
be sent to the Central Book for automatic matching and execution 
against the disseminated quote and allocation to the appropriate party. 
Orders less than or equal to the disseminated size and greater than the 
auto-match size would be routed to the Display Book. Orders greater 
than the disseminated size and less than or equal to the auto-match 
size would be routed to the Central Book for a partial execution up to 
the disseminated size. Orders greater than the disseminated size and 
greater than the auto-match size would be routed to the Display Book.
    The following four examples illustrate order routing in the ANTE 
System. First example, if a market or marketable limit order of 75 
contracts is routed to the Exchange in an option series whose current 
disseminated size is 150 contracts and whose auto-match size is 100 
contracts, the 75-contract order would be sent to the Central Book to 
be automatically matched against quotes and orders in the book and 
allocated to the appropriate party. Second example, if a market or 
marketable limit order of 125 contracts in the same option series is 
routed to the Exchange, the 125-contract order would be routed to the 
Display Book to be handled by the specialist since it exceeds the auto-
match size. Third example, if a market or marketable limit order of 200 
contracts is routed to the Exchange in the same option series, the 200-
contract order would be routed to the Display Book to be handled by the 
specialist since it exceeds the currently disseminated size of 150 
contracts and the auto-match size of 100 contracts. Fourth example, if 
the disseminated size is 75 contracts and the auto-match size is 100 
contracts, and a market or marketable limit order of 85 contracts is 
routed to the Exchange, then the order would be routed to the Central 
Book for a partial execution up to the disseminated size. Any remaining 
contracts would be sent to the Display Book to be handled by the 
specialist.
    Marketable limit orders that better the current bid or offer would 
be routed to the Display Book to be handled by the specialist. As 
discussed below, the ANTE System would provide a quote assist feature 
so that marketable limit orders that better the current bid or offer 
and have not been executed or otherwise displayed by the specialist 
would be sent to the Central Book for display within the appropriate 
timeframe established by Exchange rules. Non-marketable limit orders 
would route directly to the Central Book, which, as noted above, would 
function as the specialist's limit order book. Once a non-marketable 
limit order becomes marketable, it could be executed by being matched 
by an incoming order, matched with other orders on the specialist's 
book, or be ``taken off the book'' by the specialist or a registered 
options trader.
    Member firms would continue to submit orders to the Exchange 
through the Common Message Switch (``CMS'') for direct access into the 
ANTE System and through phone calls to the trading floor. Floor brokers 
who receive orders over the telephone (either in their booth or while 
at the specialist's post) would continue to be obligated to input order 
information into BARS or BARS handheld terminal (``HHT'') immediately 
upon receipt. Orders in BARS and BARS HHT could be manually represented 
by the floor broker or electronically forwarded to the specialist or to 
the Central Book.
    The Exchange would continue to maintain its floor-based auction 
market so that orders of size, complex orders, solicited orders, 
facilitation orders and other types of orders as determined by the 
order flow providers could potentially receive price improvement and be 
exposed to the auction market environment. Orders not eligible for 
execution through the ANTE System and orders represented by a floor 
broker at the specialist's post would trade in the same manner and 
pursuant to the same rules as they do today. Crowd trades or trades 
that occur outside the ANTE System would be allocated to registered 
options traders in the same manner as such trades are allocated 
today.\4\ Specialists would be obligated to use best efforts to attempt 
to ensure that the registered options trader responsible for announcing 
the best bid or offer during a crowd trade be appropriately allocated 
executed contracts in accordance with the participation provisions 
found in Amex Rule 950(d)--ANTE, Commentary .07.
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    \4\ See Amex Rule 950--ANTE (l), Commentary .03.
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Quoting Function for Specialists and Registered Options Traders

    Specialists and registered options traders would be given new tools 
to calculate quotations using either their own proprietary automatic 
quotation systems or an Exchange provided automatic quotation system. 
Both specialists and registered options traders would have the ability 
to stream quotations for each option series they trade. While 
specialists would continue to be required to disseminate quotations in 
all series of the option classes they trade, registered options traders 
would be able to choose whether to stream quotes with size in all or 
select series of the option classes they trade. Registered options 
traders could also choose to join the specialist's quote in those 
classes they trade and have chosen not to stream quotes. In those 
series a registered options trader has chosen to join the specialist's 
quote, he would also have the ability to manually improve a quote on a 
series by series basis. In addition, for those classes in which the 
registered options trader has chosen to join the specialist's quote, 
the registered options trader would be required to input into the ANTE 
System the size at which he would be willing to trade, which should not 
be less than ten contracts. The Exchange believes it is appropriate to 
provide registered options traders with the choice of either streaming 
quotes into the ANTE System or joining the specialist's quote with the 
ability to improve a quote on a series by series basis.
    To calculate a quote for each option series, specialists and 
registered options traders would utilize option valuation formulas to 
generate options quotations based on a number of variables. These 
variables include the price of the underlying stock, time remaining to 
expiration, interest rates (or ``cost to carry'', the amount of 
interest on the money used to pay for the options position during the 
period prior to expiration of the option series), dividends (both 
declared and anticipated) and volatility. Given that most of these 
variables are objective for inactive, less volatile options classes, 
registered options traders could rely upon the quote calculated by the 
specialist when providing additional liquidity to the market. In 
addition, from a practical perspective, allowing registered options 
traders to join the specialist's quote when their quoting variables are 
identical and likely to produce identical quotes would reduce

[[Page 16992]]

the amount of quote traffic required to be processed by the Exchange.
    The ANTE System would collect all of the quotes submitted by the 
specialist and each registered options trader, and would determine the 
best bid and best offer for dissemination pursuant to the firm quote 
rule, as the Amex Best Bid and Offer (``ABBO''). The ANTE System would 
never allow a locked or crossed market to occur in the ABBO. If a quote 
is submitted that would lock or cross the ABBO, the ANTE System would 
either: (i) revise the bid or the offer by the minimum price variant(s) 
so that the ABBO is not locked or crossed; or (ii) if the ABBO 
represents an off-floor limit order, the ANTE System would execute the 
order and allocate the trade pursuant to the post trade allocation 
process. If the Ante System revises the quote as discussed in (i), a 
notification would be sent to the ANTE Participant (specialist or 
registered options trader) submitting the quote.
    The Exchange's market data system would continue to submit only one 
quote per series to the Options Price Reporting Authority. Each quote 
entered would have a specific participant identifier to allow the ANTE 
System to allocate directly contracts executed at the best bid or best 
offer to those participants quoting at the ABBO at the time the 
execution occurs. Registered options traders, whether entering their 
own quotes or joining the specialist's quote, using ANTE hand held 
devices, would be required to specify the size of each quote they 
submit or join.
    The ANTE System would allocate to each registered options trader 
only the amount of executed contracts indicated in their quote size. As 
executed contracts are allocated to registered options traders at the 
ABBO, their quote size would decrement so that they would never be 
allocated more than their indicated quote size. Once the indicated 
quote size is depleted, the registered options trader would need to 
replenish the quote size before being allocated additional executed 
contracts. The Exchange believes that the ability to indicate a size 
for quotes in each option series would provide registered options 
traders with the ability to manage their own exposure to the market in 
order to compete more effectively.
    The Exchange believes that providing registered options traders 
with ability to auto-quote in the option classes they trade could 
potentially increase the number of messages per second flowing through 
Exchange systems many fold. As the ANTE System is being rolled-out 
across the trading floor, the Exchange would monitor the effect of 
increased quote traffic on its systems and, if needed, would limit the 
use of the auto-quote feature in less active classes or series.

Registered Options Traders Obligations

    Registered options traders would continue to be obligated to meet 
the requirements of Amex Rule 958--ANTE when quoting and trading in the 
ANTE System. As noted by the Commission in its Order announcing the 
effectiveness of the Exchange's plan to list and trade options, the 
Amex's ``* * * registered floor traders will be expected to trade in a 
way that assists the specialist in maintaining a fair and orderly 
market * * *.'' \5\ [Emphasis supplied] The Exchange recognizes that it 
is the role of a registered options trader to provide additional 
liquidity and to engage, to a reasonable degree under the existing 
circumstances, in dealings for his own account when there exists a lack 
of price continuity, a temporary disparity between the supply of and 
demand for option contracts of a particular series, or a temporary 
distortion of the price relationships between option contracts of the 
same class.
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    \5\ See Securities Exchange Act Release No. 11144 (December 19, 
1974), 40 FR 3258 (January 20, 1975).
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    Under the proposal, registered options traders would submit a 
written application to trade option classes on the ANTE System. The 
Exchange would review such applications and assign classes to each 
registered options traders based upon the following factors: (a) The 
preference of applicants; (b) assuring that financial resources 
available to a registered options trader enable him to satisfy the 
obligations set forth in Amex Rule 958--ANTE with respect to each class 
of option contracts to which he is assigned; (c) the applicant's 
expertise in option trading; (d) the applicant's prior market 
performance; and (e) the impact of the number of registered options 
traders assigned in an option class or classes on the Exchange's 
quotation system capacity. The Exchange could suspend or terminate any 
assignment of a registered options trader under this Rule and make 
additional assignments whenever, in the Exchange's judgment, the 
interests of a fair and orderly market would be best served by such 
action. Pursuant to Article II, Section 3 of the Amex Constitution, 
registered options traders would, of course, have the right to appeal 
any Exchange determination made in accordance with this Rule.
    During the first six months that an option class is on the ANTE 
System, a registered options trader applying for an assignment in that 
option class should be guaranteed an assignment in such class, provided 
for at least the immediately preceding calendar year the registered 
options trader: (i) Has been a member of the Exchange; (ii) has 
maintained a continuous presence as a registered options trader in such 
option class; and (iii) has met the requirements set forth above.
    In addition to their trading activity requirements in their 
assigned classes, registered options traders would have an electronic 
quoting requirement. Any registered options trader who transacts more 
than 20% of their contract volume in an assigned option class 
electronically and not through open outcry measured over a calendar 
quarter would be obligated to maintain continuous two-sided quotations 
for at least ten contracts in a certain percentage of series in that 
option class commencing the next calendar quarter. The percentage of 
series in which a registered options trader would be obligated to quote 
would vary depending on the amount of contract volume executed 
electronically on the Exchange in that option class. The Exchange would 
establish for each option class the percentage of series that should be 
continuously quoted by those registered options traders based upon the 
Exchange's percentage of electronic contract volume as set forth below:

------------------------------------------------------------------------
                                                              Registered
                                                               options
                                                               traders
       Percentage of overall contract volume executed         electronic
electronically on the exchange during the previous calendar    quoting
                          quarter                            requirement
                                                              percentage
                                                              of series
------------------------------------------------------------------------
50% or below...............................................           20
51%-75%....................................................           40
Above 75%..................................................           60
------------------------------------------------------------------------

    Thus, if the overall contract volume executed electronically on the 
Exchange is 65%, then registered options traders meeting their own 
threshold of more than 20% electronic contract volume, would be 
obligated to maintain continuous quotes in 40% of the series in that 
option class. It should be noted that for the first 90 days after an 
option class begins trading on the ANTE System, registered options 
traders would not have the electronic quoting requirement discussed 
above.
    Registered options traders whose electronically transacted contract 
volume is less than 20% in a given option class would not have an 
electronic quoting obligation in any specific number of series in that 
option class.
    In summary, registered options traders would, pursuant to Amex Rule 
958--ANTE, be obligated to: (1) Apply

[[Page 16993]]

for an assignment of options classes to trade on the ANTE System; (2) 
continue to have 50% of their trading activity each quarter in their 
assigned classes; (3) make competitive bids and offers as reasonably 
necessary to contribute to the maintenance of a fair and orderly 
market; (4) maintain a continuous two-sided market in a certain 
percentage of series in those classes in which the registered options 
trader has electronically transacted more than 20% of his contract 
volume; (5) disseminate a size of at least 10 contracts with each 
quote; and (6) be physically present at the specialist's post on the 
floor of the Exchange where the option class is traded in order to 
quote (either by joining the specialist's quote or streaming his own 
quotes) or submit orders in that option class.

Firm Quote Rule

    The ANTE Firm Quote Rule would reflect that registered options 
traders, when inputting their own quotes either manually on a series-
by-series basis or through the use of an Exchange provided or 
proprietary automated quote calculation system, would each be 
considered a responsible broker or dealer for their bids or offers to 
the extent of their quotation size. Any registered options trader 
choosing to join the specialist's quote would continue along with other 
registered options traders joining the specialist quote to be 
collectively considered the responsible broker or dealer for purposes 
of the firm quote rule.
    As discussed above, the ANTE System would not allow an internal 
locked or crossed market to occur. A responsible broker or dealer that 
submits to the Exchange a bid or offer that locks or crosses the ABBO 
would be deemed to have submitted a bid that is one or more minimum 
price variations lower than the bid submitted or an offer that is one 
or more minimum price variations higher than the offer submitted, so 
that the bid or offer submitted does not lock or cross the ABBO. For 
example, if the ABBO is 1.00 bid, 1.10 ask, and a responsible broker or 
dealer submits a quote 1.15 bid, 1.20 ask that would cross the ABBO, 
the responsible broker or dealer would be deemed to have submitted a 
1.05 bid, and the ABBO would become 1.05 bid, 1.10 ask. However, when 
the ABBO represents an off-floor limit order, the ANTE System would 
execute the off-floor limit order and allocate the trade in accordance 
with the post trade allocation process.

Limit Order Display Feature

    The ANTE System would provide the specialist with a quote assist 
feature that would aide the specialist in assuring that limit orders 
are displayed within the time frame established by the Exchange. The 
Exchange currently has pending with the Commission a proposal to adopt 
a rule requiring specialists to either execute or display customer 
limit orders immediately upon receipt, unless one of the exceptions set 
forth in the proposed rule applies. The proposed rule provides that 
``immediately upon receipt'' is defined ``as soon as practicable which 
shall mean, under normal market conditions, no later than 30 seconds 
after receipt.'' While the Exchange anticipates that this rule change 
should be approved prior to the completed roll-out of the ANTE System, 
development of the quote assist feature in ANTE would be necessary to 
aide the specialist in complying with Exchange expectations and 
performance standards in place today that require specialists to 
execute or display customer limit orders immediately upon receipt.
    The ANTE System would automatically display eligible limit orders 
within a configurable time that could be set on a class-by-class basis. 
If, as stated in the proposed rule, customer limit orders must be 
executed or displayed within 30 seconds, the ANTE quote assist feature 
could be set to automatically display limit orders at or close to the 
end of the 30-second timeframe or within any other shorter time frame 
established by the Exchange. A new commentary to Amex Rule 950--ANTE 
(g) would require that the specialist maintain and keep active the ANTE 
limit order quote assist feature. The Exchange would establish the time 
frame within which the quote assist feature would display eligible 
customer limit orders.
    The specialist could deactivate the quote assist feature provided 
Floor Official approval is obtained. The specialist would be required 
to obtain Floor Official approval as soon as practicable, but in no 
event later than three minutes after deactivation. If the specialist 
does not receive approval within three minutes after deactivation, the 
Exchange would review the matter as a regulatory issue. Floor Officials 
could grant approval only in instances when there is an unusual influx 
of orders or movement of the underlying that would result in gap 
pricing or other unusual circumstances. The Exchange would document all 
instances where a Floor Official has granted approval.
    The quote assist feature would be used on a pilot program basis for 
the first year that the ANTE System is in use. Thus, use of the quote 
assist feature would expire on or about April 1, 2005 or the first 
anniversary of the use of the ANTE System, whichever is later. 
Notwithstanding the foregoing, the Commission could determine to 
approve use of the quote assist feature on a permanent basis and not 
allow it to expire.
    The Exchange notes that the quote assist feature would not relieve 
the specialists of their obligation to display customer limit orders 
immediately. To the extent that a specialist excessively relies on the 
quote assist feature to display eligible limit orders without 
attempting to address the orders immediately, the specialist could be 
violating his due diligence obligation. However, brief or intermittent 
reliance on the quote assist feature by a specialist during an 
unexpected surge in trading activity in an option class would not 
violate the specialist's obligation if used when the specialist is not 
physically able to address all the eligible limit orders within 30 
seconds.
    The Exchange commits to conduct surveillance designed to detect 
whether specialists as a matter of course rely on the ANTE quote-assist 
feature to display all eligible limit orders. Initially, the ANTE 
System would not be able to produce data that would identify for 
surveillance purposes when the specialist has relied upon the quote 
assist feature to display a customer limit order versus when the 
specialist displayed the customer limit order prior to the quote assist 
time frame. The Exchange anticipates that this information would be 
available by the end of the second quarter of 2004. In the meantime, 
the Exchange would run its limit order display exception report at 
various display intervals in an attempt to detect a pattern suggestive 
of undue reliance on the quote assist feature. The Exchange would 
report to the Commission every three months the statistical data it 
uses to determine whether there has been impermissible reliance on the 
quote assist feature by specialists.

Automatic Matching and Execution of Eligible Orders in the Central Book

    The ANTE Central Book would provide for the automatic matching and 
execution of eligible market and marketable limit orders at the ABBO 
provided that there is no better market at another options exchange, 
and the order is less than the auto-match size. Orders for the accounts 
of public customers would be eligible for automatic matching and 
execution in all option classes trading on the ANTE System, provided 
such order sizes are within the auto-match size.

[[Page 16994]]

    As currently provided, the Options Trading Committee would 
determine on a class-by-class basis whether orders for the accounts of 
broker-dealers and competing market makers would be eligible for 
automatic matching and execution. The Options Trading Committee would 
also continue to determine the maximum order size eligibility for 
broker-dealer and competing market maker accounts. Orders greater than 
the public customer, broker-dealer or competing market makers maximum 
eligible auto-match size would be routed to the Display Book for full 
or partial execution at the disseminated bid or offer, if appropriate, 
up to the disseminated size. If the ABBO is not at the National best 
bid or offer (``NBBO'') and the order is not eligible for automatic 
price matching at the NBBO as set forth in Amex Rule 933--ANTE, 
Commentary .01(b), the order would be routed to the specialist for 
handling through the Options Intermarket Linkage.
    At all times during the trading day a quote with size would be 
required to be disseminated for each option series. The ANTE System's 
Specialist's Emergency Quote process would assure that a quote with 
size for each series would be available for dissemination. The 
Specialist's Emergency Quote would be disseminated whenever an 
execution results in the disseminated bid or offer size decrementing to 
zero. The Specialist's Emergency Quote would be disseminated until the 
specialist refreshes his bid or offer with size, a registered options 
trader disseminates a better bid or offer, or a limit order is received 
that betters the Specialist's Emergency Quote. The Specialist's 
Emergency Quote would not be disseminated if there is a better bid or 
offer already being disseminated by a registered options trader or 
represented by a limit order.
    The specialist could establish the Specialist's Emergency Quote 
parameters as often as the start of every trading day. The specialist 
would determine the number of minimum price variations \6\ below the 
bid or above the offer and the size associated with that bid or offer. 
For example, assume the specialist (i) is disseminating a bid of $2.00 
and an offer of $2.20 with a quote size of 50 contracts for both the 
bid and the offer, and (ii) has set his Specialist's Emergency Quote 
parameters at one minimum price variation below the bid or above the 
offer with a size of 20 contracts each for both the bid and the offer, 
the Specialist's Emergency Quote for a bid whose size has decremented 
to zero would be $.05 below that bid, and for an offer whose size has 
decremented to zero, the Specialist's Emergency Quote would be $.05 
above that offer. Furthermore, assume that an order to buy 50 contracts 
is received by the ANTE System. Previously, such an order would be 
routed to the Display Book to be manually executed and allocated by the 
specialist. Under the proposal, the 50-contract order to buy would be 
auto-matched with the bid for 50 contracts. The $2.00 bid size would 
decrement to zero, and the bid would drop one minimum price variation, 
resulting in a quote of 1.95 bid and 2.20 offered with a quote size of 
20 contracts.
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    \6\ Amex Rule 952 would set forth the minimum price variations 
for options trading. For options series trading at $3.00 per share 
per option or higher the minimum price variation would be $.10, and 
for option series trading under $3.00 the minimum price variation 
would be $.05.
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    As noted above, the Specialist's Emergency Quote would only be 
disseminated until the specialist either refreshes his bid or offer 
size or disseminates a better bid or offer. Since the Specialist's 
Emergency Quote would not represent a bid or offer created using the 
theoretical value calculated by the specialist's automated quote 
calculation system, the specialist would have an incentive to refresh 
his previous quote size or update his quote as quickly as possible. 
Therefore, it is expected that the Specialist's Emergency Quote would 
be disseminated for short periods of time only and would be replaced by 
the specialist or other market participants.

Priority and Allocation of Executed Contracts

    Similar to proposed rules currently pending at the Commission, the 
ANTE System would provide that non-broker-dealer customer orders at the 
ABBO would always have priority over all other market participants 
(i.e., broker-dealers, competing market makers, specialists and 
registered options traders). Multiple public customer orders in ANTE at 
the ABBO would be ranked for allocation purposes based on time 
priority. An ANTE Participant quoting alone at the ABBO would be 
allocated all contracts executed at his disseminated bid or offer up to 
the disseminated size. When more than one ANTE Participant is quoting 
or has orders at the ABBO, executed contracts would be automatically 
allocated as follows: (i) All non-broker-dealer customer orders would 
be allocated first; (ii) specialist participating in the quote would be 
allocated executed contracts in accordance with the specialist 
participation schedule set forth in Amex Rule 935--ANTE; and (iii) 
remaining executed contracts would be allocated to broker-dealers and 
competing market makers as one ANTE Participant, and registered options 
traders as individual ANTE Participants in accordance with provisions 
also set forth in Amex Rule 935--ANTE. In addition, Quick Trade, an 
allocation system in place today to aid in allocating executed 
contracts, would continue to exist in the ANTE System to assist in the 
allocation of executed contracts resulting from transactions occurring 
outside the ANTE System in the trading crowd. Rule provisions in place 
today for the operation of Quick Trade would apply to the use of Quick 
Trade in the ANTE System.
    In addition, ANTE Participants (specialists and registered options 
traders) and/or floor brokers representing customer orders could submit 
orders into ANTE to trade with orders in the ANTE Central Book. When an 
ANTE Participant's quote or order executes against the order in the 
book, a trade would occur and be reported to the Amex's market data 
system, and the disseminated size would be decremented to reflect the 
execution. Executed contracts would be allocated to either a single 
ANTE Participant or multiple ANTE Participants provided they have 
submitted an order within five seconds of the initial ANTE 
Participant's submission of an order. The ANTE Participant that first 
submits the order to trade would be allocated executed contracts up to 
a size established on a class-by-class basis by the Options Trading 
Committee and referred to as the ``Take Size.''
    The Options Trading Committee would consider the option's liquidity 
and the size of the trading crowd in determining the appropriate ``Take 
Size'' for each option class. For example, more liquid option classes 
with larger trading crowds would be assigned a larger ``Take Size.'' 
The Options Trading Committee would review and in some cases revise the 
assigned ``Take Sizes'' on a periodic basis, but would not change a 
``Take Size'' during the course of a trading day. The ability to 
establish the ``Take Size'' for a given option class would not be used 
in a discriminatory manner by the Options Trading Committee. If the 
specialist is entitled to be allocated the ``Take Size,'' he would be 
allocated the ``Take Size'' amount or the amount he would be entitled 
to pursuant to Amex Rule 935--ANTE (a) 4, whichever amount is greater. 
The remaining executed contracts would be allocated to those other ANTE 
Participants that have submitted an order within the five-second time 
frame. If the specialist is among those ANTE Participants, he

[[Page 16995]]

would be allocated his portion of the remaining contracts in accordance 
with the percentages set forth in Amex Rule 935--ANTE (a) 4.
    The Exchange believes that providing the initial ANTE Participant 
with executed contracts as a result of being first to submit an order 
would create further incentives for price improvement among market 
participants. Furthermore, the Exchange believes that providing a five 
second time period would prevent the ability of either the specialist 
or a well capitalized registered option trader to monopolize every 
order in the ANTE Central Book because they are able to provide the 
fastest proprietary quotation calculation system, thus creating a 
disincentive to other registered options traders unable to interact 
with orders in the ANTE Central Book. In addition, registered options 
traders would continue to have incentives to quote competitively since 
the process would only apply when the specialist and registered options 
traders attempt to access orders in the Central Book, that is, taking 
liquidity already in the marketplace. The Exchange represents that the 
process would have no effect on the specialist's and registered options 
traders' liquidity providing activities where they receive allocations 
of incoming orders based upon being at and/or the first to disseminate 
a competitive quote.
    Initially, the ANTE System would not provide access to the Central 
Book for floor brokers representing or ``working'' a customer order in 
the trading crowd to participate in the post trade allocation of orders 
taken off the Central book. These floor broker working orders are 
generally for large numbers of contracts. For working orders, when the 
floor broker is unwilling to reveal the full size of his order (since 
BARS HHT does not allow large orders to be broken down into smaller 
orders), the floor broker would remain in the trading crowd, and the 
specialist would represent the floor broker's customer interest as 
described below.
    It is anticipated that the ANTE System would provide greater 
functionality in accessing the Central Book through a handheld device 
to floor brokers by the end of 2004. In the meantime, in order to 
provide a floor broker who has entered a trading crowd to work a 
customer order with alternate access, the Amex would require: (1) The 
specialist to disengage the post trade allocation feature in the 
options series represented by the floor broker's customer order, 
provided the floor broker has alerted the specialist that he is working 
a customer order in a specified series; (2) once the floor broker's 
customer order has been executed or the floor broker leaves the trading 
crowd, the specialist to re-engage the post trade allocation feature; 
(3) the floor broker to alert the specialist within the five-second 
timeframe whenever he wants to participate on behalf of his customer in 
the post trade allocation of orders taken off the specialist's book; 
(4) floor brokers to keep a written record of when they have alerted a 
specialist that they want to participate in the post trade allocation; 
and (5) the specialist to add the customer's interest being represented 
by the floor broker in the post trade allocation whenever appropriate.
    To accomplish an allocation to the floor broker's order, the 
specialist could, on a series-by-series basis, shut off the automated 
post trade allocation feature and manually allocate the executed 
contracts. While the specialist would be required to keep track of the 
floor broker's allocation, the ANTE System would provide an auditable 
record of which ANTE Participants successfully submitted orders during 
the five-second period and were therefore entitled to participate in 
post trade allocation of executed contracts.

Automated Opening, Re-Opening and Closing Rotations

    The ANTE System would provide for an automated, orderly and 
efficient process for the opening, re-opening after a trading halt, and 
closing of all option classes. The opening rotation would provide the 
specialist with all pre-opening orders, orders on the book from the 
previous trading day, and a theoretical quote, based on the previous 
closing price, for each option series he trades. The specialist always 
would be required to submit a two-sided quote for each option series to 
be used in the opening session.
    Registered options traders would be able to view the same 
information as the specialist in what would be known as the opening 
session window. To participate at the opening, registered options 
traders could either: (1) Submit quotes using either their Exchange 
provided or proprietary automated quote calculation system to calculate 
and submit quotes for use during the automated opening rotation; (2) 
join the specialist's quote; or (3) submit limit orders on a series by 
series basis. Registered options traders would not be able to submit 
market orders in the automated opening rotation.
    Once the underlying stock opens, the options specialist would be 
able to open the overlying options by accessing the opening session 
window and allowing the submission of quotes and orders that have been 
entered. Once the opening session window is activated, no additional 
quotes, orders or cancellations would be permitted until the series 
opens. Once the series has opened, orders and quote updates would once 
again be permitted, and active trading would have begun. The ANTE 
System would automatically pair-off the opening orders at a suggested 
price based on previous day and pre-opening limit orders and the 
specialist's and registered options traders' theoretical quotes. In 
those situations when the ANTE System is unable to determine an 
appropriate opening price, the system would present the series to the 
specialist for the manual setting of an opening price in that series.
    The automated re-opening and closing rotations would be held in the 
same manner as the automated opening rotation. Amex Rule 918(a)(4) 
provides for a closing rotation to be held on the last trading day for 
expiring option series. However, under proposed Amex Rule 918--
ANTE(a)(4), the ANTE System would require an automated closing rotation 
to be held in all option series at the end of every trading day. 
Similar to the automated opening rotation, registered options traders 
would be able to view the same information as the specialist in what 
would be known as the closing session window. The automated closing 
rotation would be used to execute at-the-close orders received by the 
Exchange prior to the close. If no at-the-close orders are received in 
a particular option series, then the ANTE System's automated closing 
rotation would simply close trading in that series. Orders could be 
entered, modified or cancelled into the ANTE System up to 4:02 p.m., or 
4:15 p.m. for options on Exchange Traded Fund Shares when the 
underlying Fund Share ceases trading at 4:15 p.m. Quotes could be 
submitted up until the commencement of the rotation in such series. The 
closing rotation could begin once the underlying security has closed. 
The specialist always would be required to submit a two-sided quote for 
each option series to be used in the closing session.
    As noted above with respect to the automated opening rotation, to 
participate in the automated closing rotation, registered options 
traders could either: (1) Submit quotes using either their Exchange 
provided or proprietary automated quote calculation system to calculate 
and submit quotes for use during the automated closing rotation; (2) 
join the specialist's quote; or (3) submit limit orders on a series by 
series basis.

[[Page 16996]]

Implementation of the ANTE System

    The Exchange currently anticipates to begin its rollout of the ANTE 
System during the first quarter of 2004 and to complete the rollout by 
the third quarter of 2005. The Exchange plans to roll out the ANTE 
System on a specialist's post-by-specialist's post basis. For example, 
beginning on or about March 1, 2004, the ANTE System would be rolled 
out to all specialists and registered options traders trading some or 
all of the 71 option classes. Approximately two weeks later, the next 
specialist post would be put on the ANTE System, and during the 
following two weeks after that, the third specialist's post would be 
put on the System. Altogether, the total number of classes at these 
three posts is 258. Assuming the ANTE System performs well at the three 
posts, by the end of March 2004, option classes on additional 
specialist's posts would begin to be rolled-out, and, by the end of 
April 2004, it is anticipated that three additional specialists' posts 
and another 200 classes would be rolled-out.
    The Exchange expects that by the end of the first six months 
(August 31, 2004), its 300 most actively traded option classes would be 
trading on the ANTE System. Additional specific plans for the roll-out 
are being developed by the Exchange with the intention to have all 
equity and index option classes on the ANTE System by the second 
quarter of 2005.
    Once rolled out, the new system would be used for all option 
classes traded on the Exchange. Therefore, during the roll-out period, 
while the Exchange has option classes trading on both systems, current 
rules (as they are amended from time to time) would apply to those 
option classes continuing to trade on its current system, while the 
ANTE rules (as they are amended from time to time) would apply to those 
option classes trading on the new trading system. Once the roll-out of 
ANTE is complete, the amendments to the Exchange's options rules 
reflecting the implementation of ANTE would replace, where applicable, 
the corresponding provisions in Amex Rules 900 through 958A. Once the 
roll-out period has ended and all option classes are trading on the 
ANTE System, the Exchange would submit a ``house-keeping'' filing 
pursuant to Rule 19b-4 of the Act,\7\ which would delete rules that 
would not be applicable to the Exchange's then current trading 
environment.
---------------------------------------------------------------------------

    \7\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

    The following is a brief discussion of each of the proposed ANTE 
rules.
Rule 900--ANTE
    The implementation of ANTE would require the adoption of the 
definition of the terms ``ANTE System,'' ``ANTE Participant'' and 
``Outside the ANTE System.'' The ANTE System would be defined as the 
trading system used by the Exchange to trade options contracts. The 
ANTE System would provide for the automatic match and execution of 
orders and the collection and dissemination of quotes from specialists 
and registered options traders. An ANTE Participant would be defined to 
include both the specialist and registered options traders using the 
ANTE System in their assigned option classes. The term ``Outside the 
ANTE System'' would mean those orders that occur in a crowd trade and 
include orders of size, spread, straddle and combination orders, 
solicited orders, facilitation orders and other types of orders as 
determined by the order flow providers.
Rule 918--ANTE
    The Exchange proposes to amend Amex Rule 918 to eliminate the 
requirement that a specialist announce to the trading crowd: (i) Any 
material imbalances prior to the opening; and (ii) a price indication 
prior to effecting any transactions during a rotation. The Exchange 
believes that these announcements would not be necessary in the ANTE 
System since this information would be displayed to the registered 
options traders on their handheld devices during the opening, re-
opening and closing rotations. Amex Rule 918--ANTE would set forth the 
automated opening, reopening and closing rotation procedures. In 
addition, Amex Rule 918 would be amended to reflect that a closing 
rotation would be held at the end of every trading day in each option 
series for the execution of at-the-close orders. If there are no at-
the-close orders in a given option series, the closing rotation would 
be used to close trading in that series.
Rule 933--ANTE
    The Exchange proposes to amend Amex Rule 933 to generally reflect 
that there would no longer be a separate Auto-Ex System, but that 
automatic matching and execution of eligible orders would be part of 
the ANTE System's Central Book. A discussion of the use of the auto-
match size would be included in Amex Rule 933--ANTE (a).
    Furthermore, the Options Trading Floor Committee would be renamed 
the Options Trading Committee. Current provisions of Amex Rule 933 
relating to the Automatic Price Matching and the Automatic Price 
Improvement features of the Auto-Ex system refer to the Auto-Ex 
Enhancement Committee. The determinations made by this Committee would 
be given to the Options Trading Committee, and the Auto-Ex Enhancements 
Committee would be disbanded. Both Committees are comprised of the 
chairmen of the Specialists' Association, the Options Market Maker 
Association and the Floor Brokers Association and the Floor Governors. 
Therefore, to simplify the administration of the various automatic 
matching and execution determinations (e.g., whether Automatic Price 
Matching offered in certain option classes or whether orders for the 
accounts of broker-dealers should be eligible for automatic matching 
and execution) the Auto-Ex Enhancement Committee would be combined with 
the Options Trading Committee.
    In addition, paragraph (e) of Amex Rule 933 would be amended: (1) 
To eliminate subparagraph (i)(E) to reflect that the ANTE System would 
not disengage its automatic matching and execution feature when a 
specified number of automatic executions occur in an option class or 
series; and (2) to eliminate the references in subparagraph (i)(F)(i) 
and (ii) to reflect that the ANTE System would automatically execute 
orders when the bid or offer in a specific option series represents a 
limit order on the specialist's book.
    The discussion of the allocation of contracts executed in Auto-Ex 
found in paragraph (h) of Amex Rule 933 would be deleted since new Amex 
Rule 935--ANTE and Amex Rule 958--ANTE would set forth the provisions 
for the allocation of executed contracts in the ANTE system. Commentary 
.02 to Amex Rule 933 would also be revised and Commentary .03 to Amex 
Rule 933 would be replaced to reflect that the eligible order size for 
automatic matching and executions would be set by the Options Trading 
Committee and could be up to the size disseminated by the Exchange. New 
Commentary .03 would set forth the requirement that the specialist 
establish for each option series the parameters for the emergency quote 
to be used in situations where the disseminated bid or offer size has 
decremented to zero.
    In addition, the ANTE System would continue to provide both 
automatic price matching (the matching of the best bid or offer 
displayed by a competing exchange) and automatic price improvement 
(when the ABBO is also the NBBO, price improvement is provided based 
upon a predefined number of ``ticks'' and for orders within

[[Page 16997]]

the established order size parameter). For example, assuming that the 
Amex displayed quote of 2-2.10 is the NBBO, the predefined number of 
ticks is one, and the order size parameter is five, when an order is 
received on the Amex to buy 5 contracts at the market, the order would 
be automatically executed at an improved price of 2.05. If the buy 
order size is for a number of contracts that exceeds the order size 
parameters, then such order would be automatically executed at 2.10.
    Finally Amex Rule 933--ANTE provides that the Options Trading 
Committee could determine on a class-by-class basis whether broker-
dealer orders may be eligible for automatic matching and execution in 
the ANTE System. The Options Trading Committee would make this 
determination for all broker-dealers as a group and would not 
differentiate among broker-dealer firms or types of broker-dealers. The 
determination of the Options Trading Committee would apply to all 
broker-dealers equally, except that broker dealers who are market 
makers or specialists on an exchange and who are exempt from the 
provisions of Regulation T of the Federal Reserve Board pursuant to 
section 7(c)(2) of the Act could be treated differently than all other 
broker-dealers.
Rule 934--ANTE
    Paragraph (a) of Amex Rule 934 would remain unchanged in ANTE and 
paragraph (b) would be amended to reflect the elimination of a separate 
automatic execution system in ANTE.
Rule 935--ANTE
    Amex Rule 935--ANTE provides for the allocation of all contracts 
executed through the ANTE System as discussed above.
Rule 941--ANTE
    The text of Amex Rule 941 regarding the operation of the Options 
Intermarket Linkage has been included to reflect a change in the 
reference to Amex Rule 933--ANTE (f)(i) found in Amex Rule 941--ANTE 
(e).
Rule 950--ANTE
    Paragraph (b) of Amex Rule 950--ANTE would provide rules for 
priority and parity at the opening. Many of the provisions found in the 
Commentary to Paragraph (d) of Amex Rule 950--ANTE would not apply to 
orders executed through the ANTE System (for example, the facilitation 
and solicitation rules) since those types of orders would need to be 
presented by a floor broker during crowd trading. Paragraph (e) of Amex 
Rule 950--ANTE would provide for two additional order types applicable 
to option transaction through the ANTE System--``Immediate or Cancel'' 
and ``Fill or Kill''. Paragraph (f) of Amex Rule 950--ANTE would 
eliminate the requirement that stop and stop limit orders elected by a 
quotation not be executed without prior approval of a floor official.
    The Exchange believes that the elimination of the requirement is 
necessary given the high level of automation in the ANTE System. At the 
time the Exchange received approval to allow stop and stop limit orders 
to be elected by a quotation, the Exchange did not have automated 
quotation systems in place, and was concerned that a manually quoting 
specialist could inappropriately move his quote to elect a stop or stop 
limit order. With the advent of automated quotation systems, 
specialists rarely, if ever, quote manually. Further automation of the 
quoting and execution process in ANTE would further limit the ability 
of the specialist to manually quote. In those situations where the 
specialist is able to quote manually, surveillance would be able to 
detect if stop and stop limit order were elected inappropriately. The 
Exchange believes that obtaining floor official approval for the 
election of stop and stop limit orders by a quotation would be 
cumbersome and at times impossible for the specialist given the 
automated processes in the ANTE System.
    Paragraph (g) of Amex Rule 950--ANTE, Commentary .01 would be added 
to reflect the specialist's obligation to maintain and keep active the 
ANTE limit order quote assist feature. The Exchange would establish the 
time frame within which the quote assist feature would display eligible 
customer limit orders. The specialist could deactivate the quote assist 
feature provided Floor Official approval is obtained. Such approval 
would be required to be obtained no later than three minutes after 
deactivation. Paragraph (l) of Amex Rule 950--ANTE, Commentary .03 
would be revised to reflect that it remains the specialist's obligation 
to allocate executed contracts when an execution has occurred outside 
the ANTE System. Specialists would be obligated to use best efforts to 
attempt to ensure that the registered options trader responsible for 
announcing the best bid or offer during a crowd trade be appropriately 
allocated executed contracts in accordance with the participation 
provisions found in Amex Rule 950--ANTE (d), Commentary .07.
    The ANTE System would automatically allocate all executed contracts 
when executions occur within the system. Amex Rule 950 (m), which 
applies Amex Rule 116 to the trading of option contracts on the 
Exchange, would be eliminated, since Amex Rule 116 sets forth the 
procedures for the Opening Automated Report Service, a system that 
facilitates the efficient and accurate processing of eligible orders 
received by the Exchange prior to the opening or reopening of trading 
in designated securities. The ANTE System would replace the Opening 
Automated Report Service.
Rule 951--ANTE
    The Exchange is revising this rule to add a new Commentary .01 
discussing how the ANTE System would handle a bid or offer submitted by 
a specialist or registered options trader that locks or crosses the 
ABBO.
Rule 955--ANTE
    The Exchange is revising this rule to reflect that documentation of 
a report being sent would include electronic records within the ANTE 
System.
Rule 958--ANTE
    New paragraph (h) would provide that registered options traders may 
choose to either use an Exchange provided or proprietary automated 
quote calculation system to calculate and disseminate quotes, or join 
the specialist's disseminated quotation in some or all of his assigned 
classes or series. Registered options traders would have to be 
physically present at the specialist's post on the floor of the 
Exchange whenever they use the ANTE System to enter quotes, join the 
specialist's quote or enter an order in an option class through the 
ANTE System. Amex Rule 958 is also being amended to reflect: (1) The 
assignment of ANTE classes to registered options traders, and (2) the 
additional requirements and obligations for registered options traders 
quoting and trading through the ANTE System.
Rule 958A--ANTE
    The firm quote rule would be amended to provide: (1) That the 
registered options traders inputting their own quotes, either manually 
on a series by series basis or through the use of an Exchange-provided 
or proprietary automated quote calculation system, would be considered 
the responsible broker or dealer for the purposes of the rule, and (2) 
while the responsible broker or dealer would continue to be required to 
quote a minimum of ten contracts, customer limit orders representing 
the best bid or offer may be disseminated at less than ten contracts.

[[Page 16998]]

Rule 1. Hours of Business
    The Exchange also proposes to amend Amex Rule 1 regarding the 
Exchange's hours of business to provide that the ANTE System would 
conduct a closing rotation after the close of trading on each trading 
day. The closing rotation would commence as soon as practicable after 
4:02 p.m. or 4:15 p.m. depending on the option class. In addition, the 
Exchange takes this opportunity to correct the opening paragraph of 
Commentary .02 to reflect that options on select Exchange Traded Fund 
Shares should freely trade until 4:15 p.m. each business day.
    The Exchange believes that the ANTE System would provide investors 
with deeper and more liquid markets, market participants with 
substantially enhanced incentives to quote competitively, and order 
entry firms with a trading system that would increase their ability to 
meet their best execution and due diligence obligations.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with section 6(b) of the Act \8\ in general, and furthers 
the objectives of section 6(b)(5) of the Act \9\ in particular, because 
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 of a free and open market and a national market 
system, and, in general, to protect investors and the public interest, 
and is not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change, as amended, 
will impose no 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, as amended.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the Exchange consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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. Comments may also be submitted electronically at the 
following e-mail address: [email protected]. All comment letters 
should refer to File No. SR-Amex-2003-89. This file number should be 
included on the subject line if e-mail is used. To help the Commission 
process and review your comments more efficiently, comments should be 
sent in hard copy or by e-mail but not by both methods. 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-2003-89 and should be 
submitted by April 21, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-7144 Filed 3-30-04; 8:45 am]
BILLING CODE 8010-01-P