[Federal Register Volume 70, Number 181 (Tuesday, September 20, 2005)]
[Notices]
[Page 55186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-18617]



[[Page 55186]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52414; File No. SR-Amex-2005-046]


Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Approving a Proposed Rule Change and Amendment No. 1 Thereto To Amend 
the Exchange's Trade-Through and Locked Markets Rules

September 13, 2005.
    On April 28, 2005, the American Stock Exchange LLC (``Amex''), 
filed with the Securities and Exchange Commission (``Commission'') a 
proposed rule change pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ to 
implement Amendment No. 15 to the Plan for the Purpose of Creating and 
Operating an Intermarket Option Linkage \3\ by amending Amex Rules 940 
and 943 to add a ``trade and ship'' exception to the definition of 
``Trade-Through'' and add a ``book and ship'' exception to the 
provision relating to locked markets, respectively. On July 6, 2005, 
the Amex filed Amendment No. 1 to the proposed rule change.\4\ The 
proposed rule change, as amended, was published for comment in the 
Federal Register on August 5, 2005.\5\ The Commission received no 
comments on the proposal. This order approves the proposed rule change, 
as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ On July 28, 2000, the Commission approved a national market 
system plan for the purpose of creating and operating an intermarket 
option linkage proposed by the Amex, the Chicago Board Options 
Exchange, Incorporated, and the International Securities Exchange, 
Inc. See Securities Exchange Act Release No. 43086 (July 28, 2000), 
65 FR 48023 (August 4, 2000) (``Linkage Plan''). Subsequently, upon 
separate requests by the Philadelphia Stock Exchange, Inc., the 
Pacific Exchange, Inc., and the Boston Stock Exchange, Inc., the 
Commission issued orders to permit these exchanges to participate in 
the Linkage Plan. See Securities Exchange Act Release Nos. 43573 
(November 16, 2000), 65 FR 70851 (November 28, 2000); 43574 
(November 16, 2000), 65 FR 70850 (November 28, 2000); and 49198 
(February 5, 2004), 69 FR 7029 (February 12, 2004).
    \4\ In Amendment No. 1, the Amex revised the rule text to use 
terms consistent with Amex's current rules and made clarifying 
changes in the purpose, statutory basis, and burdens sections.
    \5\ See Securities Exchange Act Release No. 52172 (July 29, 
2005), 70 FR 45449.
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    Under the proposed rule change, an Amex member could trade an order 
at a price that is one minimum quoting increment inferior to the 
national best bid or offer (``NBBO'') if a Linkage Order \6\ is sent 
contemporaneously to the market(s) disseminating the NBBO to satisfy 
all interest at the NBBO price. The proposed rule change also would 
provide that an Amex member may book an order that would otherwise lock 
another market if a Linkage Order is sent contemporaneously to such 
other market to satisfy all interest at the lock price and only the 
remaining portion of the order is booked. The Amex proposes that, under 
trade and ship, any execution received from the market disseminating 
the NBBO must (pursuant to agency obligations) be reassigned to the 
customer order that is underlying the Linkage Order that was sent to 
trade with the market disseminating the NBBO.
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    \6\ See Amex Rule 940(b)(10).
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    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of Section 6 of the Act 
\7\ and the rules and regulations thereunder applicable to a national 
securities exchange.\8\ In particular, the Commission finds that the 
proposed rule change is consistent with Section 6(b)(5) of the Act,\9\ 
which requires, among other things, that the rules of an exchange be 
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 rule change 
should help to implement the Linkage Plan by facilitating the ability 
of Amex's members to execute their customer orders in a timely manner 
and potentially could decrease the incidence of Trade-Throughs and 
locked markets.
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    \7\ 15 U.S.C. 78f.
    \8\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-Amex-2005-046) as amended, 
is approved.
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    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 05-18617 Filed 9-19-05; 8:45 am]
BILLING CODE 8010-01-P