[Federal Register Volume 69, Number 245 (Wednesday, December 22, 2004)]
[Notices]
[Pages 76801-76803]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-27970]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50871; File No. SR-Amex-2004-72]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 Thereto by the American Stock Exchange LLC 
To Amend Its Minor Rule Violation Plan

December 16, 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 August 23, 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, II, 
and III below, which Items have been prepared by the Exchange. On 
November 23, 2004, Amex filed Amendment No. 1 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\ Amendment No. 1 replaced the original proposed rule change 
in its entirety.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Amex proposes to amend Exchange Rule 590, its Minor Rule Violation 
Fine Plan (``Plan''). The text of the proposed rule change is available 
at Amex's Office of the Secretary and at the Commission's Public 
Reference Room.

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. 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 the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange has had the Plan since 1976 which provides a 
simplified procedure for the resolution of minor rule violations. 
Codified in Amex Rule 590, the Plan has three distinct parts: Part 1 
(``General Rule Violations'') covers more substantive matters that, 
nonetheless, are deemed ``minor'' by Amex; Part 2 (``Floor Decorum'') 
covers floor decorum and operational matters; and Part 3 (``Reporting 
Violations'') covers the late submission of routine reports.
    Amex is proposing to amend Part 1 of Amex Rule 590 to bring 
additional rules within its coverage. Amex believes that inclusion of 
such matters within Part 1 of Amex Rule 590 would provide a fair means 
of prompt resolution of minor rule violations that do not rise to the 
level of a formal enforcement action. Specifically, Amex is proposing 
to add the following violations to Part 1 of Amex Rule 590:
    (i) Failure to comply with trade reporting requirements for options 
(Amex Rule 992 requires the member initiating the options transaction 
to report, or ensure the transaction is reported, within 90 seconds of 
the

[[Page 76802]]

execution to be disseminated to the Options Price Reporting Authority).
    (ii) Expand the current violation under the Plan where a specialist 
deactivates quote assist without proper authorization to include 
options (Amex Rules 950(g), Commentary .01 and 950-ANTE(g), Commentary 
.01).
    (iii) Violation of Exchange rules regarding the Options Linkage 
program relating to the responding to, and receiving of, Linkage orders 
(Amex Rule 941(d) and (e)); avoidance and satisfaction of trade-
throughs (Amex Rule 942(a)); and locked markets (Amex Rule 943).
    (iv) Violation of the Exchange's policy with regard to affirmative 
determination of the availability for borrowing of shares of Amex-
listed issues prior to effecting short sale transactions (Circular 90-
25).\4\
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    \4\ See Securities Exchange Act Release No. 27542 (December 15, 
1989), 54 FR 53222 (December 27, 1989) (SR-Amex-89-17).
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    (v) Effecting or causing to be effected a transaction outside of 
business hours through the Intermarket Trading System (Amex Rules 1, 
100, and 233).
    Amex also is proposing to amend and relocate Part 2(d)(3) of Amex 
Rule 590 (failure to submit option trade comparison data to the 
Exchange by specified deadlines) to Part 1(g) of Amex Rule 590. The 
proposed amendment would expand the requirement of reporting trade 
comparison data to include all transactions effected on the Exchange 
(presently, the rule only applies to options). Repositioning the above-
mentioned violation would allow such behavior to be subject to Amex 
Enforcement Department action rather than Amex Floor Official action 
and also would increase the size of possible fines. The Exchange 
believes that inclusion of such matters within Part 1 of Amex Rule 590 
would provide a fair means of prompt resolution of minor rule 
violations that do not rise to the level of a formal enforcement 
action.
    As previously noted, Part 3 of Amex Rule 590, Reporting Violations, 
allows the specified departments of the Exchange that routinely receive 
regulatory reports from members and member organizations to issue 
abbreviated ``written statements'' to persons who may have violated the 
specified reporting rules, identifying the rules violated, the act or 
omission constituting the violation, and the amount of the fine. The 
fines are $50 per day for each day the report is late. The Exchange is 
proposing to revise Part 3 of Amex Rule 590 to reflect the current 
filing schedule for the Form 50 (Short Position), which was previously 
only required to be filed at or about mid-month but is now additionally 
required to be filed at or about the end of the month for selected 
derivative products.\5\ The text of Part 3(g) of Amex rule 590 as it 
discusses Form 1-S (Round Lot Short Sales Transactions) is being 
corrected to reflect that the form is due on Friday rather than 
Thursday.\6\
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    \5\ See Amex Member Firm Regulation Informational Circular 98-
0234 which pertains to Diamonds, SPDRS, MIDCAP SPDRS, and the 
various WEBS series known as iSHARES.
    \6\ See Amex Member Firm Regulation Informational Circular 97-
597, which states that the Form 1-S will be due on the Friday 
following the week included in the report.
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2. Statutory Basis
    Amex believes that the proposed rule change, as amended, is 
consistent with Section 6(b) of the Act,\7\ in general, and furthers 
the objectives of Sections 6(b)(1),\8\ 6(b)(6),\9\ and 6(b)(7),\10\ in 
particular, in that it would enhance the ability of the Exchange to 
enforce compliance by its members and persons associated with its 
members with the provisions of the Act, the rules and regulations 
thereunder, and the rules of the Exchange; it would help ensure that 
members and persons associated with members are appropriately 
disciplined for violations of the Act, the rules and regulations 
thereunder, and the rules of the Exchange; and it would provide a fair 
procedure for disciplining members and persons associated with members.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(1).
    \9\ 15 U.S.C. 78f(b)(6).
    \10\ 15 U.S.C. 78f(b)(7).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    Amex believes the proposed rule change, as amended, would impose no 
burden on competition not necessary or appropriate in furtherance of 
the purposes of the Act.

C. Self-Regulatory Organization's Statement of 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

    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 self-regulatory organization 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 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-2004-72 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-2004-72. 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 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 Section, 450 Fifth Street, 
NW., Washington, DC 20549. Copies of such filing also will be available 
for inspection and copying at the principal offices of the Exchange. 
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-2004-72 
and should be submitted on or before January 12, 2005.


[[Page 76803]]


    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. 04-27970 Filed 12-21-04; 8:45 am]
BILLING CODE 8010-01-M