[Federal Register Volume 70, Number 115 (Thursday, June 16, 2005)]
[Notices]
[Pages 35142-35143]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3094]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51815; File No. SR-Amex-2005-55]


Self-Regulatory Organizations; American Stock Exchange, LLC; 
Notice of Filing of Proposed Rule Change Relating to the Continuation 
of a Quote Assist Feature in Options on a Pilot Basis

June 9, 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 May 19, 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 extend its pilot program implementing a quote-
assist feature retroactively from April 30, 2005 to May 18, 2005. The 
text of the proposed rule change is available on the Amex's Web site 
(www.amex.com), at the Amex's principal office, 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 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.

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

1. Purpose
    Exchange Rule 958A(e) currently requires all option specialists to 
execute or display customer limit orders that improve the bid or offer 
by price or size immediately upon receipt, unless one of the exceptions 
set forth in the rule applies. ``Immediately upon receipt'' is defined 
in the rule ``as soon as practicable which shall mean, under normal 
market conditions, no later than 30 seconds after receipt.'' \3\
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    \3\ See Securities Exchange Act Release No. 51062 (January 21, 
2005), 70 FR 4163 (January 28, 2005).
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    In order to assist the specialists in complying with Amex Rule 
958A(e) as described above, at the end of June 2004, the Exchange 
provided specialists with an automated quote assist feature as part of 
the Amex Options Display Book (also referred to as ``AODB'') on a pilot 
program basis.\4\ The pilot program expired on April 30, 2005, and was 
extended on May 18, 2005, for those products not on the ANTE System.\5\ 
The

[[Page 35143]]

Exchange proposes in this filing to retroactively extend the quote 
assist feature pilot program from April 30, 2005, to May 18, 2005, for 
those products not yet trading on the ANTE System. There are currently 
only three option classes not yet trading on the ANTE System. These 
products, which are all index options, will be put on the ANTE System 
once issues relating to the System's quote calculation methodology for 
these products are corrected.
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    \4\ See Securities Exchange Act Release No. 49797 (June 3, 
2004), 69 FR 32637 (June 10, 2004).
    \5\ See SR-Amex-2005-54, filed May 18, 2005.
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    The quote assist feature automatically displays eligible limit 
orders within a configurable time that can only be set on a floor-wide 
basis by the Exchange. While all customer limit orders are expected to 
be displayed immediately, the quote assist feature can be set to 
automatically display limit orders at or close to the end of the 30-
second time frame, or within any other shorter time frame established 
by the Exchange. In the event that there are instances in which the 
specialist has not yet addressed the order within the applicable 30-
second period, the quote assist feature will automatically display the 
eligible customer limit order in the limit order book at or close to 
the end of that period. The quote assist feature helps to ensure that 
eligible customer limit orders are displayed within the required time 
period then in effect. Commentary .01 to Amex Rule 950(g) requires the 
specialist to maintain and keep active the limit order quote assist 
feature. The Exchange has established the time frame within which the 
quote assist feature displays eligible customer limit orders, which 
time frame does not exceed the customer limit order display requirement 
set forth in Amex Rule 958A(e).
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act,\6\ in general, and furthers the objectives 
of Section 6(b)(5) of the Act,\7\ in particular, in that it is designed 
to prevent fraudulent and manipulative acts and practices, to promote 
just and equitable principles of trade, and, in general, to protect 
investors and the public interest. The quote assist feature provides a 
mechanism to ensure that eligible customer limit orders are displayed 
within the appropriate time frame.
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    \6\ 15 U.S.C. 78f.
    \7\ 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 will impose no 
burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were either 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 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-2005-55 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File Number SR-Amex-2005-55. 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, 100 F Street, 
NE., 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-2005-55 and should be 
submitted on or before July 7, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3094 Filed 6-15-05; 8:45 am]
BILLING CODE 8010-01-P