[Federal Register Volume 70, Number 164 (Thursday, August 25, 2005)]
[Notices]
[Pages 49956-49957]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4638]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52298; File No. R-Amex-2004-47]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Approval to Proposed Rule Change and Amendment No. 1 Thereto, 
and Notice of Filing and Order Granting Accelerated Approval to 
Amendment No. 2 Thereto, Relating to Listing and Trading of Yield 
Underlying Participating Securities (YUPS)

August 18, 2005.

I. Introduction

    On June 10, 2004, the American Stock Exchange LLC (``Amex'') 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 approve for 
listing and trading Yield Underlying Participating Securities 
(``YUPS''), representing a beneficial ownership interest in the common 
stock of a single, publicly-traded company and a series of U.S. 
Treasury Securities with quarterly maturities. On April 15, 2005, Amex 
filed Amendment No. 1 to the proposed rule change. The proposed rule 
change and Amendment No. 1 thereto were published for comment in the 
Federal Register on April 22, 2005.\3\
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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. 51566 (April 18, 
2005), 70 FR 20946 (``YUPS Notice'').
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    The Commission received no comments on the proposal. This order 
approves the proposed rule change, as amended by Amendment No. 1. 
Simultaneously, the Commission provides notice of filing of Amendment 
No. 2 to the proposed rule change and grants accelerated approval of 
Amendment No. 2.\4\
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    \4\ On August 16, 2005, the Exchange submitted Amendment No. 2 
to the proposed rule change.
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    YUPS will be eligible for listing and trading, including trading 
pursuant to unlisted trading privileges, pursuant Commentary .03(a)-(f) 
of Rule 1202.\5\ YUPS will also be subject to Commentary .13 to Amex 
Rule 170,\6\ which allows a limited exception for specialist in Single 
TIRs, including the YUPS, to buy on plus ticks and/or sell on minus 
ticks to bring the Single TIR/YUPS into parity with the underlying 
securities. YUPS will not qualify for side-by-side trading and 
integrated market making as set forth in Amex Rule 175(c)(2) and 
985(e),\7\ under Commentary .05 to Amex Rule 1202. Furthermore, YUPS 
will be subject to Commentary .06 to Amex Rule 1202, regarding trading 
halts, and Commentary .07 to Amex Rule 1202, regarding allowable 
percentages set forth in Section 107B of the Amex Company Guide 
(``Company Guide'').\8\
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    \5\ The listing standards for YUPS described herein were 
originally incorporated in a separate proposal for generic listing 
standards for trust issued receipts based on a single underlying 
listed security (``Single TIRs''). See Securities Exchange Act 
Release No. 51567 (April 18, 2005), 70 FR 20939 (April 22, 2005) 
(``Single TIR Proposal''). Following Amex's withdrawal of the Single 
TIR Proposal, Amex submitted Amendment No. 2 to this proposed rule 
change to incorporate those same listing standards solely for YUPS 
products. Therefore, in this order, the Commission is only approving 
the listing and trading of the YUPS-type product, which represents 
beneficial ownership interests in the common stock of a single 
publicly traded company and a series of U.S. Treasury securities 
with quarterly maturities.
    \6\ This new Commentary .13 to Amex Rule 170 was proposed in the 
Single TIR Proposal.
    \7\ See Single TIR Proposal.
    \8\ See Single TIR Proposal.

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[[Page 49957]]

II. Discussion and Commission Findings

    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 of the Act \10\ and 
the rules and regulations thereunder. The Commission finds specifically 
that the proposed rule change is consistent with Section 6(b)(5) of the 
Act,\11\ 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.
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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.
    \11\ 15 U.S.C. 78f(b)(5).
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    The Commission finds good cause for approving proposed Amendment 
No. 2 before the 30th day after the date of publication of notice of 
filing thereof in the Federal Register. Amex filed Amendment No. 2 
solely for the purpose of incorporating generic listing standards 
pursuant to Rule 19b-4(e) \12\ for YUPS. The generic listing standards 
proposed in Amendment No. 2 were previously noticed in the separately 
proposed Single TIR proposal,\13\ and incorporated by reference in the 
YUPS notice.\14\ Amex has recently withdrawn the Single TIR proposal. 
In order to retain the generic listing standards for the YUPS product, 
Amex submitted Amendment No. 2 to this proposed rule change, to 
incorporate those standards as part of this proposed rule change. 
Because the generic listing standards proposed in Amendment No. 2 were 
already published in the Federal Register as part of the Single TIR 
proposal and because no comments were received on the Single TIR 
proposal, the Commission finds good cause for accelerating approval of 
Amendment No. 2 in order to prevent any unnecessary delay in the 
approval of this proposed rule change in its entirety.
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    \12\ 17 CFR 240.19b-4(e).
    \13\ See Single TIR proposal.
    \14\ See YUPS Notice.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment No. 2 
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-2004-47 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-2004-47. 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 the 
principal office of 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-2004-47 and should be submitted on or before September 15, 
2005.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\15\ that the proposed rule change (SR-Amex-2004-47), as amended by 
Amendment No. 1, be, and it hereby is, approved, and that Amendment No. 
2 to the proposed rule change be, and hereby is, approved on an 
accelerated basis.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
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    \15\ 15 U.S.C. 78s(b)(2).
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[FR Doc. E5-4638 Filed 8-24-05; 8:45 am]
BILLING CODE 8010-01-P