[Federal Register Volume 69, Number 200 (Monday, October 18, 2004)]
[Notices]
[Pages 61421-61422]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2701]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50511; File No. SR-Amex-2004-83]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change Relating to Revisions to Amex Rules 1000 and 1000A

October 8, 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, 2004, 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 and 
II below, which Items have been prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons and to approve the 
proposal, on an accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 Amex Rule 1000, Commentary .03 and Amex 
Rule 1000A, Commentary .02.
    Proposed new language is italicized; proposed deletions are in 
[brackets].

Rule 1000

Portfolio Depositary Receipts

    (a)-(b) No change
    * * * Commentary
    .01--.02 No change
    .03 The Exchange may approve a series of Portfolio Depositary 
Receipts for listing and trading pursuant to Rule 19b-4(e) under the 
Securities Exchange Act of 1934 provided each of the following criteria 
is satisfied:
    (a) No change
    (b) Index Methodology and Calculation. (i) The index underlying a 
series of Portfolio Depositary Receipts will be calculated based on 
either the market capitalization, modified market capitalization, 
price, equal-dollar or modified equal-dollar weighting methodology; 
(ii) If the index is maintained by a broker-dealer, the broker-dealer 
shall erect a ``fire wall'' around the personnel who have access to 
information concerning changes and adjustments to the index and the 
index shall be calculated by a third party who is not a broker-dealer, 
and (iii) The current index value will be disseminated every 15 seconds 
over the consolidated tape [Consolidated Tape Association's Network B].
    (c)-(h) No change
    .04-.08 No change

Rule 1000A

Index Fund Shares

    (a)-(b) No change
    * * * Commentary
    .01 No change
    .02 The Exchange may approve a series of Index Fund Shares for 
listing pursuant to Rule 19b-4(e) under the Securities Exchange Act of 
1934 provided each of the following criteria is satisfied:
    (a) No change
    (b) Index Methodology and Calculation. (i) The index underlying a 
series of Index Fund Shares will be calculated based on either the 
market capitalization, modified market capitalization, price, equal-
dollar or modified equal-dollar weighting methodology; (ii) If the 
index is maintained by a broker-dealer, the broker-dealer shall erect a 
``fire wall'' around the personnel who have access to information 
concerning changes and adjustments to the index and the index shall be 
calculated by a third party who is not a broker-dealer, and (iii) The 
current index value will be disseminated every 15 seconds over the 
consolidated tape [Consolidated Tape Association's Network B].
    (c)-(i) No change
    .03-.09 No change

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 III below. The Amex 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Amex Rule 1000, Commentary .02 and Amex Rule 1000A, Commentary .03 
provide generic listing standards for Portfolio Depositary Receipts 
(``PDRs'') and Index Fund Shares (``IFSs''), respectively, to permit 
listing and trading of these securities pursuant to Rule 19b-4(e) under 
the Act.\3\ Specifically, Amex Rule 1000, Commentary .03(b), and Amex 
Rule 1000A, Commentary .02(b) provide that the current index value for 
the index underlying a series of PDRs (in the case of Amex Rule 1000) 
and IFSs (in the case of Amex Rule 1000A) will be disseminated every 15 
seconds over the Consolidated Tape Association's Network B. The 
Exchange proposes to change this requirement to provide that the 
underlying index values will be disseminated every 15 seconds over the 
consolidated tape. This proposed rule change is substantially similar 
to the generic listing standard relating to index value dissemination 
that is in place at the New York Stock Exchange (``NYSE''), which 
requires that underlying index values for Investment Company Units be 
disseminated over the ``consolidated tape.'' \4\ The Amex

[[Page 61422]]

believes that the proposed rule change will provide additional 
flexibility in structuring IFSs or PDRs listed or traded pursuant to 
unlisted trading privileges under Rule 19b-4(e) by permitting the 
dissemination of underlying index values over any of the networks 
associated with the Consolidated Tape Association.
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    \3\ 17 CFR 240.19b-4(e). Rule 19b-4(e) provides that the listing 
and trading of a new derivative securities product by a self-
regulatory organization shall not be deemed a proposed rule change, 
pursuant to paragraph (c)(1) of Rule 19b-4, if the Commission has 
approved, pursuant to Section 19(b) of the Act, the self-regulatory 
organization's trading rules, procedures and listing standards for 
the product class that would include the new derivative securities 
product and the self-regulatory organization has a surveillance 
program for the product class. See Securities Exchange Act Release 
No. 40761 (December 8, 1998), 63 FR 70952 (December 22, 1998).
    \4\ The NYSE's Rule 703.16 (B)(3) states in part: ``If a series 
of Investment Company Units is listed for trading on the Exchange in 
reliance upon Rule 19b-4(e) under the Exchange Act, the current 
value of the underlying index must be disseminated every 15 seconds 
during trading hours over the consolidated tape.'' See Securities 
Exchange Act Release No. 43679 (December 5, 2000), 65 FR 77949 
(December 13, 2000) (SR-NYSE-00-46). ``Investment Company Units'' is 
defined in NYSE Rule 703.16 to comprise the same securities that are 
covered by Amex Rule 1000 (PDRs) and Amex Rule 1000A (IFSs). 
Specifically, NYSE Rule 703.16 defines an ``Investment Company 
Unit'' as ``a security that represents an interest in a registered 
investment company (``Investment Company'') that could be organized 
as a unit investment trust, an open-end management investment 
company, or a similar entity.'' Amex Rule 1000 defines a PDR as 
(among other things) a security ``that is based on a unit investment 
trust'' and Amex Rule 1000A defines an IFS as a security ``that is 
issued by an open-end management investment company.'' Telephone 
discussion between Marija Willen, Associate General Counsel, Amex, 
and Natasha Cowen, Attorney, Division of Market Regulation 
(``Division''), Commission, on October 7, 2004.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \5\ in general, and with Section 6(b)(5) 
in particular,\6\ in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 will 
impose any burden on competition not necessary or appropriate in 
furtherance of the purposes of the Act.

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. 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. Comments may be 
submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-Amex-2004-83 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-Amex-2004-83. 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, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 the 
filing also will be available for inspection and copying at the 
principal offices of the Amex. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-Amex-2004-83 and should be submitted on or before 
November 8, 2004.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    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.\7\ In 
particular, the commission finds that the proposed rule change is 
consistent with Section 6(b)(5) of the Act,\8\ which requires that the 
rules of an exchange be designed to promote just and equitable 
principles of trade, remove impediments to and perfect the mechanism of 
a free and open market and a national securities system, and protect 
investors and the public interest.
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    \7\ In approving this proposal, the Commission has considered 
its impact of efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the proposed rule change is similar to 
another proposed rule change that previously has been subject of a full 
comment period pursuant to Section 19b of the Act.\9\ The Commission 
does not believe that proposed rule change raises any new regulatory 
issues.
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    \9\ 15 U.S.C. 78s(b). See Securities Exchange Act Release No. 
43679 (December 5, 2000), 65 FR 77949 (December 13, 2000) (SR-NYSE-
00-46).
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    Accordingly, the Commission finds good cause, pursuant to Section 
19(b)(2) of the Act,\10\ for approving the proposed rule change prior 
to the thirtieth day after the date of publication of notice thereof in 
the Federal Register.
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    \10\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-Amex-2004-83), is hereby 
approved on an accelerated basis.
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    \11\ Id.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
 [FR Doc. E4-2701 Filed 10-15-04; 8:45 am]
BILLING CODE 8010-01-P