[Federal Register Volume 70, Number 66 (Thursday, April 7, 2005)]
[Notices]
[Pages 17730-17731]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1580]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51460; File No. SR-Amex-2005-007]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Approval of Proposed Rule Change and Amendment No. 1 Thereto 
To Require Specialists To Use and Maintain a Back-Up Automatic Quote 
System in ANTE Classes

March 31, 2005.
    On January 12, 2005, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend Amex Rule 950-ANTE(l), Commentary .02(a) 
to require specialists to use and maintain a back-up automatic quote 
system in ANTE classes, and to incorporate violations of this 
requirement in the Exchange's minor rule violation plan (``Plan''). The 
proposed rule change was published for comment in the Federal Register 
on February 23, 2005.\3\ The Commission received no comments on the 
proposal. On March 15, 2005, the Exchange filed Amendment No. 1 to the 
proposed rule change.\4\ This order approves the proposed rule change, 
as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 51209 (February 15, 
2005), 70 FR 8859.
    \4\ See Partial Amendment dated March 15, 2005 (``Amendment No. 
1''). In Amendment No. 1, the Exchange made technical corrections to 
the proposed rule text. Accordingly, this Amendment is not subject 
to notice and comment.
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    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange,\5\ 
and, in particular, the requirements of Section 6 of the Act \6\ and 
the rules and regulations thereunder. The Commission finds specifically 
that the proposed rule change, as amended, is consistent with Section 
6(b)(5) of the Act \7\ because 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. The 
Commission also finds that the Exchange's Plan is consistent with 
Section 6(b)(6) of the Act,\8\ which require that the rules of an 
exchange enforce compliance and provide appropriate discipline for 
violations of Commission and Exchange rules.
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    \5\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. See 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 15 U.S.C. 78f(b)(6).
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    The Commission believes that requiring Amex specialists to use and 
maintain an Exchange-provided automatic quote system as a back-up to 
the Exchange-approved proprietary automatic quote system in ANTE 
classes should help to assure an orderly market. In addition, the 
Commission believes that including this requirement in the Exchange's 
Plan should strengthen the ability of the Exchange to carry out its 
oversight and enforcement responsibilities as a self-regulatory 
organization (``SRO''). In approving this proposed rule change, as 
amended, the Commission in no way minimizes the importance of 
compliance with Amex Rule 950--ANTE(l), Commentary .02(a) and all other 
rules subject to the imposition of fines under the Exchange's Plan. The 
Commission believes that the violation of any SRO's rules, as well as 
Commission rules, is a serious matter. However, the Exchange's Plan 
provides a reasonable means of addressing rule violations that do not 
rise to the level of requiring formal disciplinary proceedings, while 
providing greater flexibility in handling certain violations. The 
Commission expects that the Amex will continue to conduct surveillance 
with due diligence and make a determination based on its findings, 
whether fines of more or less than the recommended amount are 
appropriate for violations under the Plan, on a case-by-case basis, or 
a violation requires formal disciplinary action.

[[Page 17731]]

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-Amex-2005-007), as amended, 
be, and it hereby is, approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    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. E5-1580 Filed 4-6-05; 8:45 am]
BILLING CODE 8010-01-P