[Federal Register Volume 70, Number 70 (Wednesday, April 13, 2005)]
[Notices]
[Pages 19534-19535]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-7435]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51503; File No. SR-Amex-2004-65]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Approval to Proposed Rule Change, and Amendments No. 1 and 2 
Thereto, Relating to Revisions to Amex Rule 21, Appointment of Floor 
Officials

    On August 10, 2004, 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 21, Appointment of Floor 
Officials. 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 proposed rule change, as 
amended, was published for comment in the Federal Register on March 8, 
2005.\5\ The Commission received no comments on the proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1 the Amex revised the text of the proposed 
rule.
    \4\ In Amendment No. 2 the Amex further revised the text of the 
proposed rule.
    \5\ See Securities Exchange Act Release No. 51279 (March 1, 
2005), 70 FR 11279.
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    The Exchange proposed the following amendments to Amex Rule 21: (1) 
Eliminate the requirement that an Exchange Official who is appointed as 
a senior Floor Official must have previously served as a member of the 
Exchange's Board of Governors (``Board'');\6\ (2) provide that an 
Exchange Official who has been appointed as a Senior Floor Official 
shall have 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\ and

[[Page 19535]]

(3) clarify that an Exchange Official who is appointed as a Senior 
Floor Official may not participate in meetings of the Board unless the 
Board invites such person to attend its meetings.\8\
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    \6\ The proposal would retain the requirement that any such 
Exchange Official must spend a substantial part of his or her time 
on the Exchange's floor.
    \7\ The Exchange has represented that 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.
    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. The Amex noted that these rules may change 
with future Amex rule changes. Under the amendment to Amex Rule 21, 
Exchange Officials appointed as Senior Floor Officials would be able 
to act in place of Floor Governors with respect to these 
responsibilities. 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).
    \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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    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 \9\ 
and, in particular, the requirements of Section 6(b) of the Act \10\ 
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,\11\ 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\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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    The Commission notes that the proposed rule change, as amended, is 
designed to facilitate the supervision of trading activity on the 
Exchange's trading floor. The proposal would expand the pool of 
Exchange Officials who could be appointed to serve as Senior Floor 
Officials by eliminating the requirement that such Exchange Officials 
previously must have served as an Exchange Governor. Further, the 
proposal specifies that Exchange Officials who are appointed as Senior 
Floor Officials would have 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. 
The Commission also notes that the proposed rule change would clarify 
the status of Exchange Officials who are appointed as Senior Floor 
Officials by specifying that these officials may not participate in 
Board meetings except to the extent that they are invited to attend 
such meetings. The Commission finds that the proposed rule change, as 
amended, is consistent with Section 6(b) of the Act.\12\
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    \12\ 15 U.S.C. 78f(b).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\13\ that the proposed rule change (SR-Amex-2004-65), as amended, 
be, and hereby is, approved.
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    \13\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated Authority.\14\
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    \14\ 17 CFR 200.30,-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 05-7435 Filed 4-12-05; 8:45 am]
BILLING CODE 8010-01-M