[Federal Register: September 20, 2005 (Volume 70, Number 181)]
[Notices]
[Page 55186]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20se05-115]
[[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