[Federal Register Volume 70, Number 35 (Wednesday, February 23, 2005)]
[Notices]
[Pages 8859-8860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-695]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51209; File No. SR-Amex-2005-007]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange LLC To Require Members To Use and 
Maintain a Back-up Automatic Quote System in ANTE Classes

February 15, 2005.
    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 January 12, 2005, 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 Amex. The 
Commission is publishing this notice to solicit 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Amex proposes to require members to use and maintain a back-up 
quoting system in ANTE classes and to incorporate violations of this 
requirement in the Exchange's Minor Rule Violation Plan (``Plan''). The 
text of the proposed rule change is available on the Amex's Web site 
(http://www.amex.com), at the 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 Amex included statements 
concerning the purpose of and basis for the proposed rule change. The 
text of these statements may be examined at the places specified in 
item IV 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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange seeks to amend Amex Rule 950-ANTE(l), Commentary 
.02(a) to require a Specialist utilizing an Exchange-approved 
proprietary automatic quote system in a class trading on Amex's ANTE 
system to have available for immediate use the Exchange-provided 
automatic quote system that is independent of the Specialist's primary 
automatic quote system. Specialists would be required to take 
appropriate provisions to immediately fall back onto the Exchange-
provided automatic quotation system should their Exchange-approved 
proprietary automatic quote system fail. Included within ``appropriate 
provisions'' would be the requirement that Specialists be diligent in 
keeping their theoretical values current in their back-up system. This 
requirement would apply at all times during market hours. The Amex 
believes that the back-up system would need to be independent in order 
to ensure that any event that could cause a failure to the primary 
automatic quote system would not corrupt the back-up system.
    The Exchange believes that the failure of a proprietary automatic 
quote system could result in the Amex's inability to open an entire 
group of listed options classes for a brief or sometimes lengthy time 
period. Thus, the Amex seeks to require that Specialists have the 
Exchange-provided automatic quotation system ready, as a back-up, 
should their primary automatic quote system fail. The Exchange believes 
that failure to comply with the proposed requirement should be subject 
to sanction under the Plan.
    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 sections: Part 1 
(``General Rule Violations'') which covers more substantive matters 
that, nonetheless, are deemed ``minor'' by the Commission and the Amex; 
Part 2 (``Floor Decorum'') which covers Floor Decorum and operational 
matters; and Part 3 (``Reporting Violations'') which

[[Page 8860]]

covers the late submission of routine reports.
    Accordingly, the Amex proposes to amend Part 1(g) of Amex Rule 590 
to allow for the issuance of minor fines when a Specialist fails to 
comply with the Exchange's procedures regarding maintaining and 
utilizing the Exchange-provided automatic quote system as a back-up to 
the Specialist's Exchange-approved proprietary automatic quote system.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\3\ in general, and furthers the 
objectives of section 6(b)(5) of the Act,\4\ in particular, in that it 
is designed 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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    \3\ 15 U.S.C. 78f(b).
    \4\ 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 that is 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 by the Exchange on 
this proposal.

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 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-2005-007 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-2005-007. 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 Section, 450 Fifth 
Street, NW., Washington, DC 20549. Copies of such filing also will be 
available for inspection and copying at the principal office 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-2005-007 and should be submitted on or before March 16, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
Jill M. Peterson,
Assistant Secretary.
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    \5\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E5-695 Filed 2-22-05; 8:45 am]
BILLING CODE 8010-01-P