[Federal Register Volume 70, Number 132 (Tuesday, July 12, 2005)]
[Notices]
[Pages 40082-40084]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3684]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51965; File No. SR-Amex-2005-070]


Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Revising Various Implementation Dates for the ANTE 
System

July 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 June 24, 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. On June 29, 2005, 
the Exchange filed Amendment No. 1 to the proposed rule change.\3\ The 
Amex filed the proposal, as amended, as a ``non-controversial'' 
proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act 
\4\ and Rule 19b-4(f)(6) thereunder.\5\ 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\ Amendment No. 1 clarified that the proposed rule change was 
being submitted under Section 19(b)(3)(A)(iii) of the Act and Rule 
19b-4(f)(6) thereunder and requested that the Commission waive the 
five-day pre-filing and 30-day operative delay requirements of Rule 
19b-4(f)(6).
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 17 CFR 240.19b-4(f)(6).
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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 (i) Rule 900-ANTE to provide a revised 
date for the completion of the implementation of the ANTE System for 
all options classes; and (ii) Rule 935-ANTE, Commentary .01 to 
establish a revised date for increased floor broker functionality in 
the ANTE System. The text of the proposed rule change is available on 
the Amex's Web site (http://www.amex.com), at the Amex's Office of the 
Secretary, 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, as 
amended, and discussed any comments it received on the proposal. The 
text of these statements may be examined at the places specified in 
Item IV below. The Exchange 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
Revised Implementation Date--Amex Rule 900-ANTE
    On May 20, 2004, the Commission approved the Amex's proposal to 
implement a new options trading platform known as the Amex New Trading 
Environment (``ANTE''). On May 25, 2004, the Amex began rolling out the 
ANTE System on its trading floor on a specialist's post-by-specialist's 
post basis. At that time, it was anticipated that the roll out would be 
completed by the end of the second quarter of 2005. It was also 
anticipated that the three hundred most actively traded option classes 
would be trading on the ANTE System by January 31, 2005. The 
implementation date for the three hundred most actively traded option 
classes was subsequently extended to April 30, 2005.\6\ The Amex has 
rolled out the ANTE System to all its option classes except three--the 
Japan Index (``JPN''), the Nasdaq 100 Index (``NDX'') and the Mini 
Nasdaq Index (``MNX''). The Exchange represents that there are specific 
reasons why these products have not been rolled out on the ANTE System. 
The specialists in these products are concerned that the theoretical 
price calculator provided by the ANTE System may not accurately price 
the options on these indexes. With respect to JPN, a software release 
giving the specialist greater pricing functionality is expected to be 
available by July 18, 2005. With respect to the MNX and the NDX, the 
specialist is waiting for his own theoretical index price calculator to 
be installed. The Exchange expects that the MNX/NDX specialist will 
have its proprietary calculator in place by August 31, 2005.
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    \6\ See Securities Exchange Act Release No. 51642 (May 2, 2005), 
70 FR 24130 (May 6, 2005).
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    The Amex is now proposing to further revise its implementation 
schedule to provide that the remaining three option classes will be on 
the ANTE System by August 31, 2005. Maintaining two

[[Page 40083]]

systems for the trading of options--the legacy system (XTOPS, AODB and 
Auto-Ex) and ANTE--is costly. Consequently, the Exchange submits that 
it is working diligently to have all option classes on the ANTE System 
by August 31, 2005, so that it can retire its legacy systems.
Increased Floor Broker Functionality--Amex Rule 935-ANTE
    Amex Rule 935-ANTE (b) provides for the post trade allocation of 
contracts executed as the result of the submission of orders to trade 
with orders in the ANTE Central Book. If more than one ANTE Participant 
\7\ and/or a floor broker representing a customer order submits an 
order to trade with an order in the ANTE Central book within a period 
not to exceed five seconds after the initial ANTE Participant has 
submitted its order, all those ANTE Participants and the floor broker's 
customer will be entitled to participate in the allocation of any 
executed contracts. The Exchange represents that the ANTE System is 
currently unable to provide the functionality necessary for floor 
brokers representing customer orders in the trading crowd the ability 
to directly participate in the post trade allocation of orders taken 
off the Central Book. Commentary .01 to Amex Rule 935-ANTE provides a 
temporary methodology for the specialist to disengage the post trading 
allocation system in a specific series, which allows the floor broker 
to alert the specialist within the five-second timeframe whenever his 
customer wants to participate in post trade allocation, and allows the 
specialist to provide for the customer's participation in post trade 
allocation when appropriate. The Commission approved the procedures set 
forth in Commentary .01 to Amex Rule 935-ANTE as a ``reasonable, 
temporary solution.'' \8\ Commentary .01 to Amex Rule 935-ANTE also 
provides that the ANTE System will give floor brokers greater 
functionality accessing the Central Book on March 31, 2005 or such 
other date as established by the Exchange and submitted to the 
Commission pursuant to Section 19(b) of the Act. The Exchange 
subsequently established June 30, 2005 as the date the increased 
functionality will be available in the ANTE System. Due to a delay in 
the roll out of the increased floor broker functionality, the Exchange 
now proposes to establish August 31, 2005 as the date set forth in 
Commentary .01 to Amex Rule 935-ANTE for such increased functionality.
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    \7\ Amex Rule 900-ANTE (b)(45) defines ANTE Participant as the 
specialist and/or registered options trader(s) assigned to trade a 
specific options class on the ANTE System.
    \8\ See Securities Exchange Act Release No. 49747 (May 20, 
2004), 69 FR 30344 (May 27, 2004).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of Section 6(b) of the Act,\9\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act,\10\ in 
particular, in that it is designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, 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 designed to prohibit 
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 does not believe that the proposed rule change will 
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

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Exchange has designated the proposed rule change, as amended, 
as a ``non-controversial'' rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \11\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\12\ The Amex represents that the foregoing rule change does 
not: (i) Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
by its terms, does not become operative for 30-days after the date of 
this filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest. 
The Exchange has requested that the Commission waive the five-day pre-
filing requirement and the 30-day operative delay period for ``non-
controversial'' proposals and make the proposed rule change, as 
amended, effective and operative upon filing.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
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    The Commission has determined to waive the five-day pre-filing 
requirement and the 30-day operative delay period.\13\ The Commission 
notes that the Amex has represented that the theoretical price 
calculators for the final three options classes are not installed and/
or functioning properly and that it has not yet implemented the 
functionality for floor brokers representing customer orders. The 
Commission believes that extending the deadline for implementing Amex 
Rules 900- and 935-ANTE by two months should afford Amex the time 
needed to install and/or fix the theoretical price calculators and to 
implement the floor broker customer order functionality. Furthermore, 
the Commission believes that it is in the interest of investors and the 
public to delay implementation of the ANTE system until all of the 
components are in place and functioning properly. Therefore, the 
foregoing rule change has become immediately effective and operative 
upon filing pursuant to Section 19(b)(3)(A)(iii) of the Act \14\ and 
Rule 19b-4(f)(6) thereunder.\15\
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    \13\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
    \14\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \15\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60-days of the filing of the proposed rule 
change, the Commission may summarily abrogate such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.\16\
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    \16\ For purposes of calculating the 60-day period within which 
the Commission may summarily abrogate the proposed rule change, as 
amended, under Section 19(b)(3)(C) of the Act, the Commission 
considers the period to commence on June 29, 2005, the date on which 
the Amex submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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:

[[Page 40084]]

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-2005-070 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.
    All submissions should refer to File Number SR-Amex-2005-070. 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 Room. Copies of such 
filing also will be available for inspection and copying at Amex's 
Office of the Secretary. 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-2005-070 and should be submitted on or before August 2, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3684 Filed 7-11-05; 8:45 am]
BILLING CODE 8010-01-P