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###### Securities and Exchange Commission

          - [Release No. 34-49145; File No. SR-Amex-2004-03]

January 29, 2004.

                    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 January 14, 2004, the American Stock Exchange LLC (“Exchange” or “Amex”) filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in Items I and II 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 and is approving the proposed rule change on an accelerated basis.                

## I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The Exchange proposes to extend for six (6) months, until July 31, 2004, the current pilot program regarding transaction fees for trades executed through the intermarket options linkage (the “Linkage”) on the Exchange.

The proposed fee schedule is available at the Exchange 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 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 III below. The Exchange 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 Amex is proposing to extend for six (6) months, until July 31, 2004, the current pilot program establishing Exchange fees for Principal Orders (“P Orders”) and Principal Acting As Agent Orders (“P/A Orders”) executed through the Linkage. The fees in connection with the pilot program are scheduled to expire on January 31, 2004.[3]                                          The fees charged by the Amex under the pilot program consist of a $0.26 per contract transaction fee, a $0.05 comparison fee, and a $0.05 floor brokerage fee. In addition to the previously approved fees, Amex is proposing to subject incoming P and P/A orders for certain licensed index products to a licensing fee [4]                                          as part of the pilot.[5]                                          These are the same fees charged to specialists and Registered Options Traders (“ROTs”) for transactions executed on the Exchange. Consistent with the Linkage Plan, the Amex does not charge for the execution of Satisfaction Orders sent through the Linkage.[6] 

As was the case in its filing for the original pilot program, the Exchange believes that the existing fee amount for equity options that currently is charged to Exchange specialists and ROTs should apply to executions resulting from Linkage Orders. Market makers from other option exchanges accessing the liquidity of the Exchange by sending P or P/A Orders accordingly pay the same fees applicable to Amex specialists and ROTs for such executions.

Based on the limited experience operating the Linkage, the Exchange believes that an extension of the pilot program for six (6) months until July 31, 2004 is appropriate. During this time, the Exchange intends to study the effect of Linkage fees and prepare to file a permanent Linkage fee proposal.

#### 2. Statutory Basis

                    The Amex believes the proposed rule change is consistent with Section 6(b)(4) of the Act [7]                                          regarding the equitable allocation of reasonable dues, fees and other charges among exchange members and other persons using exchange facilities.                

### B. Self-Regulatory Organization's Statement on Burden on Competition

The Exchange believes that the proposed rule change will impose no burden on competition.

### C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others

No written comments were solicited or received with respect to the proposed rule change.

## III. 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. Comments may also be submitted electronically at the following e-mail address:                     *rule-comments@sec.gov.*                     All comment letters should refer to File No. SR-Amex-2004-03. 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, comments should be sent in hardcopy or by e-mail but not by both methods. Copies of the submission, all subsequent                           ( print page 5620)                        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 will also be available for inspection and copying at the principal office of the Exchange. All submissions should be submitted by February 26, 2004.                

## IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change

                    After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder, applicable to a national securities exchange,[8]                                          and, in particular, with the requirements of section 6(b) of the Act [9]                                          and the rules and regulations thereunder. The Commission finds that the proposed rule change is consistent with section 6(b)(4) of the Act,[10]                                          which requires that the rules of the Exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities. The Commission believes that the extension of the Exchange's Linkage fee pilot program until July 31, 2004 will give the Exchange and the Commission further opportunity to evaluate whether such fees are appropriate.                

                    The Commission finds good cause, pursuant to section 19(b)(2) of the Act,[11]                                          for approving the proposed rule change prior to the thirtieth day after the date of publication of the notice of the filing thereof in the                     **Federal Register**                    . The Commission believes that granting accelerated approval will preserve the Exchange's existing pilot program for Linkage fees without interruption as the Amex and the Commission further consider the appropriateness of Linkage fees.                

## V. Conclusion

*It is therefore ordered,*                     pursuant to section 19(b)(2) of the Act,[12]                                          that the proposed rule change (SR-Amex-2004-03) is hereby approved on an accelerated basis for a pilot period to expire on July 31, 2004.                

                        For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[13] 

Jill M. Peterson,

Assistant Secretary.

# Footnotes

1.                             15 U.S.C. 78s(b)(1).                    
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2.                             17 CFR 240.19b-4.                    
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3.                                                     *See*                         Securities Exchange Act Release No. 47822 (May 9, 2003), 68 FR 27115 (May 19, 2003) (SR-Amex-2003-14).                    
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4.                             For example, specialists and registered options traders on the Exchange are subject to a $.10 per contract fee for transactions in QQQ options.                    
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5.                             Telephone conversation between Jeffrey Burns, Associate General Counsel, Amex, and Jennifer Colihan, Special Counsel, Division of Market Regulation, Commission on January 23, 2004 clarifying that the previous approval of fees for Linkage Orders (                        *see*                         note 3,                         *supra*) did not include the Options Licensing Fee.                    
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6.                                                     *See*                         Securities Exchange Act Release No. 47298 (January 31, 2003), 68 FR 6524 (February 7, 2003) (File No. 4-429).                    
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7.                             15 U.S.C. 78f(b)(4).                    
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8.                             In approving this rule, the Commission notes that it has considered its impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).                    
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9.                             15 U.S.C. 78f(b).                    
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10.                             15 U.S.C. 78f(b)(4).                    
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11.                             15 U.S.C. 78s(b)(2).                    
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12.                                                     *Id.*
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13.                                 17 CFR 200.30-3(a)(12).                        
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[FR Doc. 04-2358 Filed 2-4-04; 8:45 am]

BILLING CODE 8010-01-P