[Federal Register: June 30, 2006 (Volume 71, Number 126)]
[Notices]
[Page 37627-37629]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jn06-112]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54039; File No. SR-Amex-2006-58]
Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing of a Proposed Rule Change Relating to an Amendment to
Amex Rule 27
June 23, 2006.
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 9, 2006, 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, II
and III below, which Items have been prepared by Amex. The Commission
is publishing this notice to solicit comments on the proposed rule
change from interested persons.
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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 Exchange proposes to amend Amex Rule 27 to revise the number
and composition of the Allocation Committee (the ``Allocations
Committee'' or the ``Committee'').
The text of the proposed rule change is available on the Amex's Web
site (http://www.amex.com), the Office of the Secretary, Amex, and at
the Commission's Public Reference Room.
The text of the proposed rule change also appears below. Proposed
new language is italicized; proposed deletions are in [brackets].
Rule 27. Allocations Committee
(a) The Allocations Committee allocates equity securities of
operating companies, equity options admitted to dealings on the
Exchange and all other securities to be admitted for trading on the
Exchange. It consists of [six] eight persons drawn from a roster of
approximately 75 persons and is comprised as follows: the Chief
Executive Officer (or his or her designee), a representative of an
upstairs member firm and either (i) [four (4)] six (6) brokers for
equities and other securities admitted to trading on the Exchange
except for Exchange Traded Funds and options; (ii) [two (2)] three (3)
brokers and [two (2)] three (3) Registered Traders for Exchange Traded
Funds; or (iii) [two (2)] three (3) brokers and [two (2)] three (3)
Registered
[[Page 37628]]
Options Traders for options. The Allocations Committee is chaired by
the Chief Executive Officer (or his or her designee) who does not vote
except to make or break a tie. In the absence of the Chief Executive
Officer (or his or her designee), a Floor Governor or a Senior Floor
Official may chair the Committee. The minimum quorum for the
transaction of business by the Allocations Committee shall be four
persons. The upstairs member firm representative may attend meetings by
telephone.
(b) through (i) No Change.
Commentary * * *
.01 through .05 No Change.
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 and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV 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
The Exchange proposes to change the number and composition of the
Allocation Committee from six (6) to eight (8) members. Currently, the
Committee consists of the Chief Executive Officer (or his or her
designee), a representative of an upstairs member firm and either: (i)
Four (4) brokers for equities and other securities admitted to trading
on the Exchange except for Exchange Traded Funds and options; (ii) two
(2) brokers and two (2) Registered Traders for Exchange Traded Funds;
or (iii) two (2) brokers and two (2) Registered Options Traders for
options. The Exchange proposes an amendment to Amex Rule 27 to revise
the number and composition of the Allocations Committee so that the
Committee consists of the Chief Executive Officer of the Exchange (or
his or her designee), a representative of an upstairs member firm and
either: (i) Six (6) brokers for equities and other securities admitted
to trading on the Exchange except for Exchange Traded Funds and
options; (ii) three (3) brokers and three (3) Registered Traders for
Exchange Traded Funds; or (iii) three (3) brokers and three (3)
Registered Options Traders for options. The minimum quorum requirement
would remain at four (4) persons.\3\
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\3\ The Commission notes that the Allocations Committee is
chaired by the Chief Executive Officer (or his or her designee) who
does not vote except to make or break a tie. See Amex Rule 27(a).
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Article II, Section 3 of the Amex Constitution provides the Board
of Governors (``Board'') with the authority to allocate and reallocate
the equity securities of operating companies (``equities''), options
and other securities listed on the Exchange. The Board, in connection
with the allocation and reallocation of equities, Exchange Traded
Funds, options and other securities admitted to trading on the
Exchange, has delegated this authority to the Allocations Committee.\4\
In October 2005, the Commission approved an Exchange proposal to
combine the separate Equities Allocation Committee, Options Allocation
Committee and Special Allocation Committee into one (1) Allocations
Committee.\5\ Pursuant to the Approval Order, the number and
composition of the Allocations Committee was changed from eleven (11)
to the current six (6) members.
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\4\ See Amex Rule 27(a).
\5\ See Securities Exchange Act Release No. 52646 (October 20,
2005), 70 FR 61854 (October 26, 2005) (``Approval Order'').
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The Exchange states that the experience of the Exchange to date has
revealed that due to the smaller number of members of the Allocations
Committee, the minimum quorum requirement of four (4) persons to
conduct business has become overly burdensome. In many cases, the
Allocations Committee fails to meet the minimum quorum requirement to
transact business. Accordingly, the Exchange believes that this
proposal to increase the number of Allocations Committee Members from
the current six (6) to eight (8) will provide greater flexibility and
efficiency in the securities allocation process.
The Exchange believes that this proposal is necessary because of
the difficulty in meeting the minimum quorum requirement with a reduced
number of Committee members adopted in October 2005. Accordingly, the
Exchange believes that the proposed change to the number and
composition of the Allocations Committee is needed to ensure that the
Allocations Committee is better able to meet the minimum quorum
requirement.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with the provisions of section 6(b) of the Act,\6\ in general, and with
section 6(b)(5) of the Act,\7\ 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 facilitating transactions in
securities, and to remove impediments to and perfect the mechanism of a
free and open market and a national market system.
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\6\ 15 U.S.C. 78f(b).
\7\ 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 did not receive any written comments on the proposed
rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of publication of this notice in the
Federal Register or within such longer period (i) as the Commission may
designate up to 90 days of such date if it finds such longer period to
be appropriate and publishes its reasons for so finding or (ii) as to
which the self-regulatory organization consents, the Commission will:
A. By order approve such proposed rule change; or
B. Institute proceedings to determine whether the proposed rule
change should be disapproved.
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:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-Amex-2006-58 on the subject line.
[[Page 37629]]
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, Station Place, 100 F
Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-Amex-2006-58. 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 the Exchange. 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-2006-58 and should be submitted on or before July
21, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. 06-5906 Filed 6-29-06; 8:45 am]
BILLING CODE 8010-01-P