[Federal Register Volume 70, Number 44 (Tuesday, March 8, 2005)]
[Notices]
[Pages 11279-11281]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-935]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51279; File No. SR-Amex-2004-65]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment Nos. 1 and 2 Thereto by the American Stock 
Exchange LLC Relating to Revisions to Amex Rule 21, Appointment of 
Floor Officials

March 1, 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 August 10, 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 Amex. On December 22, 
2004, the Amex filed Amendment No. 1 to the proposed rule change.\3\ On 
February 3, 2005, the Amex filed Amendment No. 2 to the proposed rule 
change.\4\ 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 Form 19b-4, dated December 22, 2004 (``Amendment No. 
1''). In Amendment No. 1, the Amex revised the text of the proposed 
rule.
    \4\ See Form 19b-4, dated February 3, 2005 (``Amendment No. 
2''). In Amendment No. 2, the Amex further revised the text of the 
proposed rule.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Amex Rule 21, Appointment of Floor 
Officials, to modify the requirements for Exchange Officials who may be 
appointed as Senior Floor Officials.
    Below is the amended text of the proposed rule change. Proposed new 
language is in italics; proposed deletions are in brackets.
* * * * *

Appointment of Floor Officials

    Rule 21. (a) Senior Floor Officials.--Each governor of the Exchange 
who spends a substantial part of his time on the Floor shall serve as a 
Senior Floor Official. The Vice Chairman of the Board shall serve as 
the Senior Supervisory Officer on the Floor. If the Vice Chairman does 
not spend a substantial part of his time on the Floor, the Chairman 
subject to the approval of the Board, shall designate one of the 
governors serving as a Senior Floor Official to act as the Senior 
Supervisory Officer on the Floor. In the absence of the person 
designated as the Senior Supervisory Officer on the Floor, the Senior 
Floor Officials, according to an order of succession to be prescribed 
at the time of appointment, or the acting Senior Floor Official, as 
provided in paragraph (b) of this Rule, shall exercise the authority of 
the Senior Supervisory Officer on the Floor. In addition, the Chairman, 
or the Chief Executive Officer if delegated by the Chairman, subject to 
the approval of the Board, and in consultation with the Senior 
Supervisory Officer on the Floor, may appoint additional Senior Floor 
Officials from among the Exchange Officials (appointed pursuant to the 
provisions of Section 3 of Article II of the Constitution), who [have 
previously served as Governors of the Exchange pursuant to Section 
1(a)(1)(iv) of Article II of the Constitution, and who continue to] 
spend a substantial part of their time on the Floor of the Exchange. An 
Exchange Official who has been appointed as a Senior Floor Official has 
the same authority and responsibilities as a Floor Governor with 
respect to matters that arise on the Floor and require review or action 
by a Floor Governor or Senior Floor Official. An Exchange Official who 
has been appointed as a Senior Floor Official may not participate in 
meetings of the Exchange's Board of Governors unless the Board invites 
such person to attend its meetings.
    (b) No change
    Commentary * * * 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 Amex 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 Amex has prepared summaries, set forth 
in Sections A, B, and C below, of the most significant aspects of such 
statements.

[[Page 11280]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    A Floor Governor is an individual who serves on the Exchange's 
governing board who spends a substantial part of his or her time on the 
trading floor. Currently, there are three Floor Governors. Pursuant to 
Amex Rule 21, Floor Governors are automatically deemed to be Senior 
Floor Officials. In addition to Floor Governors, Exchange Officials who 
spend a substantial portion of their time on the trading floor and who 
previously served as a governor also may be appointed as a Senior Floor 
Official. Currently, one Exchange Official is designated as a Senior 
Floor Official.
    Floor Officials are generally responsible for overseeing the 
orderly conduct of trading on the Floor, and the Exchange's rules 
require Floor Governors both to rule on situations that arise on the 
trading floor and to review decisions made by other Floor Officials.\5\ 
The Exchange's rules also require Floor Governors or Senior Floor 
Officials to chair meetings of the Performance and Allocations 
Committees. The Amex represents that these supervisory obligations and 
committee assignments place a substantial burden on Floor Governors and 
the one Senior Floor Official, which will increase when the number of 
Floor Governors is reduced in connection with the sale of the Class B 
Interest in the Exchange.\6\
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    \5\ A number of Amex rules provide for Floor Governor or Senior 
Floor Official action or review with respect to matters that arise 
on the trading floor. These rules may change with future Amex rule 
changes. It is contemplated that Exchange Officials appointed as 
Senior Floor Officials would be able to act in place of Floor 
Governors with respect to these responsibilities if the proposed 
rule change is approved. The following is a list of Amex rules that 
call for action or review by Floor Governors or Senior Floor 
Officials: Rule 1 (Hours of Business), Rule 22 (Authority of Floor 
Officials), Rule 25 (Cabinet Trading of Equity and Derivative 
Securities), Rule 26 (Performance Committee), Rule 27 (Allocations 
Committee), Rule 118 (Trading in Nasdaq National Market Securities), 
Rule 119 (Indications, Openings and Reopenings), Rule 128A 
(Automatic Execution), Rule 170 (Registration and Functions of 
Specialists), Rule 590 (Minor Rule Violation Fine System), Rule 904 
(Position Limits), Rule 918 (Trading Rotations, Halts and 
Suspensions), Rule 933 (Automatic Execution of Option Orders), Rule 
959 (Accommodation Transactions), Rule 918C (Trading Rotations, 
Halts and Suspensions), Rule 933-ANTE (Automatic Matching and 
Execution of Options Orders).
    \6\ See Securities Exchange Act Release No. 50057 (July 22, 
2004), 69 FR 45091 (July 28, 2004).
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    As previously noted, the Exchange's rules currently provide for the 
appointment of Senior Floor Officials from among Exchange Officials who 
are active on the trading floor and who previously served as governors 
of the Exchange. However, there is only one former governor active on 
the floor who is available to serve as a Senior Floor Official. After 
the completion of the sale of the Class B Interest, moreover, there 
likely will be only two Floor Governors at any one time. The Exchange, 
consequently, is proposing to modify the requirements for Exchange 
Officials who may be appointed as Senior Floor Officials to eliminate 
the requirement of prior service as a Governor. This will significantly 
expand the pool of persons able to chair meetings of the Allocations 
and Performance Committees, which meet well in excess of 100 times per 
year. The Exchange also proposes to amend Amex Rule 21 to provide that 
an Exchange Official who has been appointed as a Senior Floor Official 
has the same authority and responsibilities as a Floor Governor with 
respect to matters that arise on the trading floor and require review 
or action by a Floor Governor or Senior Floor Official.\7\ The Amex 
believes that this change will facilitate the supervision of trading 
activity on the floor by expanding the number or persons who have the 
authority of a Floor Governor. The Exchange also proposes to modify 
Amex Rule 21 to clarify that Exchange Officials who are appointed as 
Senior Floor Officials are not members of the Exchange's Board of 
Governors and that these individuals have no right to attend meetings 
of the Board except to the extent that they are invited by the Board to 
participate in its meetings.\8\
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    \7\ An Exchange Official who makes a ruling on the floor would 
not be permitted to review such ruling while later acting as a 
Senior Floor Official or in place of a Floor Governor. Telephone 
conversation among William Floyd-Jones, Assistant General Counsel, 
Amex, Susie Cho, Special Counsel, Division of Market Regulation 
(``Division''), Commission, and Geraldine Idrizi, Attorney, 
Division, Commission, on January 31, 2005.
    \8\ Article II, Section 3 of the Amex Constitution (The Board of 
Governors--Powers, Duties and Procedures) currently allows the Board 
to invite persons who are not members of the Board to participate in 
meetings of the Board. In relevant part, Article II, Section 3 
provides: ``The Board may invite a person, not a member thereof, to 
attend its meetings and to participate in its deliberations, but 
such person shall not have the right to vote.''
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2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b) of the Act,\9\ in general, and furthers 
the objectives of Section 6(b)(5),\10\ in particular, in that the 
proposed rule change, as amended, 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; and is not 
designed to permit unfair discrimination between customers, issuers, 
brokers or dealers.
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    \9\ 15 U.S.C. 78f(b).
    \10\ 15 U.S.C. 78f(b)(5).
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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 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

    Amex neither solicited nor received written comments 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 self-regulatory organization consents, the Commission will:
    (a) By order approve such proposed rule change, as amended, or
    (b) Institute proceedings to determine whether the proposed rule 
change, as amended, 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. 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-2004-65 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.

[[Page 11281]]

    All submissions should refer to File Number SR-Amex-2004-65. 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, as 
amended, that are filed with the Commission, and all written 
communications relating to the proposed rule change, as amended, 
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 also will be available for 
inspection and copying at the principal office of 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-2004-65 and should be 
submitted on or before March 29, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 11 17 CFR 200.30-3(a)(12).
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 Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-935 Filed 3-7-05; 8:45 am]
BILLING CODE 8010-01-P