Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the American Stock Exchange LLC Relating To an Increase in the Maximum Size of Options Orders Eligible To Be Entered Through the Amex Order File System Into the Amex Options Display Book

[Federal Register Volume 64, Number 224 (Monday, November 22, 1999)]
[Notices]
[Pages 63836-63837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30320]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42128; File No. SR-Amex-99-41]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange 
LLC Relating To an Increase in the Maximum Size of Options Orders 
Eligible To Be Entered Through the Amex Order File System Into the Amex 
Options Display Book

November 10, 1999.
    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 October 8, 1999, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. 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 increase from 100 to 250 the maximum 
number of equity and index option contracts in an order that may be 
entered through the Amex Order File System (``AOF'') into the Amex 
Options Display Book (``AODB''). The text of the proposed rule change 
is available at the Office of the Secretary, Amex and at the Commission

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 Exchange 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 Section 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 AOF routes orders to specialists' order books and to Auto-Ex, 
an automatic execution system that executes public customer market and 
marketable limit orders in options at the best bid or offer displayed 
at the time the order is entered. Currently, the AOF permits a Member 
or Member Firm to enter orders for up to 100 option contracts directly 
into an Exchange specialist's order book (the AODB) from off the 
Exchange's trading floor.\3\
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    \3\ The Exchange represents that currently, orders for more than 
100 option contracts are communicated by telephone to the floor 
broker, who seeks to execute that order in the trading crowd. 
Telephone conversation between Scott Van Hatten, Legal Counsel, Amex 
and Gordon Fuller, Special Counsel and Gail Fortson, Paralegal 
Specialist, Division of Market Regulation (``Division''), SEC 
(October 8, 1999).
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    Amex proposes to increase the maximum size of options orders that 
may be entered through the AOF into the AODB from 100 to 250 option 
contracts.\4\ This increase in maximum size of orders eligible for 
automated entry into the AODB will permit Members and Member Firms to 
send a larger percentage of orders directly to a specialist's order 
book for execution, resulting in increased automated order handling. 
Amex believes this increased automated order handling will benefit 
customers as well as Members and Member Firms by expanding the number 
of option orders eligible for automated handling and promoting the 
orderly and timely delivery, processing and execution of such orders.
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    \4\ Amex represents that its system capacity is sufficient to 
accommodate the anticipated increased volume of orders entered into 
AODB as a result of the increase in maximum order size. Telephone 
conversation between Scott Van Hatten, Amex, And Gordon Fuller, 
Special Counsel and Gail Fortson, Paralegal Specialist, Division, 
SEC (October 8, 1999).
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    The Exchange represents that AOF/AODB has been successful in 
enhancing execution and operational efficiencies. It anticipates that 
the proposed increase in the AOF.
2. Statutory Basis
    The Exchange represents that the proposed rule change is consistent 
with Section 6(b) \5\ of the Act, in general, and furthers the 
objectives of Section 6(b)(5) \6\ in particular, because 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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    \5\ 15 U.S.C. 78f(b).
    \6\ 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.

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 written comments on 
the proposed rule change.

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

    The Amex represents that the foregoing rule change effects a change 
in an Amex order-entry system that: (1) Does not significantly affect 
the protection of investors or the public interest; (2) does not impose 
any significant burden on competition; and (3) does not have the effect 
of limiting the access to or availability of the system. Therefore, the 
rule change has become effective pursuant to Section

[[Page 63837]]

19(b)(3)(A) of the Act \7\ and subparagraph (f)(5) of Rule 19b-4 under 
the Act.\8\
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 24.19b-4(f)(5).
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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.\9\
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    \9\ In reviewing this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
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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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 
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 at 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 submissions should refer to File No. SR-Amex-99-41 and 
should be submitted December 13, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margart H. McFarland,
Deputy Secretary.
[FR Doc. 99-30320 Filed 11-19-99; 8:45 am]
BILLING CODE 8010-01-M