[Federal Register Volume 70, Number 121 (Friday, June 24, 2005)]
[Notices]
[Pages 36672-36673]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3278]



[[Page 36672]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51868; File No. SR-Amex--2005-044]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Order Granting Accelerated Approval to a Proposed 
Rule Change Relating to Dissemination of the Underlying Index Value for 
Portfolio Depositary Receipts and Index Fund Shares

June 17, 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 April 22, 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 and 
II 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. In addition, the Commission is granting 
accelerated approval of the proposed rule change.
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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 amend the listing standards for Portfolio 
Depositary Receipts (``PDRs'') and Index Fund Shares (``IFSs'') to 
provide that the current value of the underlying index must be widely 
disseminated by one or more major market data vendors at least every 15 
seconds during the time the PDR or IFS trades on the Exchange. The text 
of the proposed rule change is available on the Amex's Web site (http://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 Exchange included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it had received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item III 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
    Amex Rule 1000, Commentary .02 and Amex Rule 1000A, Commentary .03 
provide listing standards for PDRs and IFSs, respectively, to permit 
listing and trading of these securities pursuant to Rule 19b-4(e) under 
the Act.\3\ Rule 19b-4(e) provides that the listing and trading of a 
new derivative securities product by a self-regulatory organization 
shall not be deemed a proposed rule change, pursuant to paragraph 
(c)(1) of Rule 19b-4, if the Commission has approved, pursuant to 
Section 19(b) of the Act, the self-regulatory organization's trading 
rules, procedures and listing standards for the product class that 
would include the new derivative securities product and the self 
regulatory organization has a surveillance program for the product 
class.\4\
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    \3\ 17 CFR 240.19b-4(e).
    \4\ See Securities Exchange Act Release No. 40761 (December 8, 
1998), 63 FR 70952 (December 22,1998).
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    The Amex rules for PDRs and IFSs currently provide that the current 
index value for the index underlying a series of PDRs (in the case of 
Amex Rule 1000) and IFSs (in the case of Amex Rule 1000A) will be 
disseminated every 15 seconds over the consolidated tape. The Amex 
believes that, rather than identifying specifically in their rules the 
index dissemination service (that is, the consolidated tape), it is 
preferable to reflect in the rules a requirement for wide dissemination 
of the underlying index values. This proposed rule change would make 
clear that the value of the underlying index must be widely 
disseminated by a reputable index dissemination service, such as the 
Consolidated Tape Association, Reuters or Bloomberg. The Amex believes 
that the specific identity of the index dissemination service is not 
necessary, and the purpose of the rule would be achieved, as long as 
the service used for dissemination is reputable, accepted in the 
investment community, and effects appropriately wide dissemination of 
the particular index.
    The Exchange therefore proposes to change the listing standards for 
PDRs and IFSs to provide that the value of the underlying index must be 
widely disseminated by one or more major market data vendors at least 
every 15 seconds during the time when the PDR or IFS trades on the 
Exchange.
    As currently is the case, if the official index does not change 
during some or all of the period when trading is occurring (as is 
typically the case with pre-market-open and after-hours trading, and 
also with foreign indexes because of time zone differences or holidays 
in the countries where such indexes' components trade), then the last 
official calculated index value must remain available throughout the 
Amex trading hours.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
the provisions of Section 6(b) of the Act,\5\ in general, and furthers 
the objectives of Section 6(b)(5) of the Act,\6\ particular, in that it 
is designed 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 Amex believes that 
clarifying the rules helps all market participants.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 would 
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

    Written comments on the proposed rule change were neither solicited 
nor received.

III. 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-2005-044 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.


[[Page 36673]]


    All submissions should refer to File Number SR-Amex-2005-044. 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 publicly available. All 
submissions should refer to File Number SR-Amex-2005-044 and should be 
submitted on or before July 15, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder, applicable to a national securities 
exchange.\7\ In particular, the Commission believes that the proposed 
rule change is consistent with Section 6(b)(5) of the Act,\8\ which 
requires among other things, that the rules of the Exchange are 
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 believes that the proposed index 
dissemination requirement, which is similar to the index dissemination 
requirement used in the listing standards for narrow-based index 
options,\9\ will help to ensure the transparency of current index 
values for indexes underlying PDRs and IFSs.
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    \7\ In approving this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
    \9\ See e.g., Chicago Board Options Exchange Rule 24.2(b); 
International Securities Exchange Rule 2002(b); Pacific Exchange 
Rule 5.13; and Philadelphia Stock Exchange Rule 1009A(b) (listing 
standards for narrow-based index options requiring that, among other 
things, the current underlying index value be reported at least once 
every 15 seconds during the time the index option trades on the 
exchange).
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    The Amex has requested that the Commission find good cause for 
approving the proposed rule change prior to the thirtieth day after 
publication of notice thereof in the Federal Register. The Commission 
notes that it has recently approved a similar proposal regarding the 
dissemination of the underlying index value for PDRs and IFSs traded on 
Nasdaq.\10\ The Commission believes that granting accelerated approval 
of the proposal will allow the Amex to immediately implement these 
similar listing standards already in place on Nasdaq. Accordingly, the 
Commission finds good cause, pursuant to Section 19(b)(2) of the 
Act,\11\ for approving the proposed rule change prior to the thirtieth 
day after the date of publication of notice thereof in the Federal 
Register.
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    \10\ See Securities Exchange Act Release No. 51748 (May 26, 
2005) (order approving File No. SR-NASD-2005-024 relating to 
dissemination of the underlying index value for PDRs and IFSs 
trading on Nasdaq).
    \11\ 15 U.S.C. 78s(b)(2).
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V. Conclusion


    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-Amex-2005-044) be, and 
hereby is, approved on an accelerated basis.
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E5-3278 Filed 6-23-05; 8:45 am]
BILLING CODE 8010-01-P