74544 Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Notices 

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

Injunction, they may be subject to the 

prohibitions of section 9(a). 

2. Section 9(c) of the Act provides that 

the Commission shall grant an 

application for an exemption from the 

disqualification provisions of section 

9(a) if it is established that these 

provisions, as applied to the Applicants, 

are unduly or disproportionately severe 

or that the Applicants’ conduct has been 

such as not to make it against the public 

interest or the protection of investors to 

grant the application. Applicants have 

filed an application pursuant to section 

9(c) of the Act seeking temporary and 

permanent orders exempting them from 

the provisions of section 9(a) of the Act.

3. Applicants believe that they meet 

the standards for exemption specified in 

section 9(c). Applicants state that the 

prohibitions of section 9(a) as applied to 

them would be unduly and 

disproportionately severe and that the 

conduct of Applicants has been such as 

not to make it against the public interest 

or the protection of investors to grant 

the exemption from section 9(a). 

Applicants state that none of their 

current or former officers, directors or 

employees who are engaged in the 

provision of investment advisory or 

underwriting services to the Funds 

participated in any way in the conduct 

described in the Complaint. Applicants 

also state that although some of the 

Funds advised by the Applicants held 

PNC securities in their portfolios during 

the time discussed in the Complaint, as 

far as Applicants are aware none of the 

officers, portfolio managers or any other 

investment personnel employed by the 

Applicants had any knowledge of any 

non-public information relating to, or 

had any involvement in, the conduct 

alleged in the Complaint. Applicants 

state that they are entirely separate from 

AIG’s businesses that were involved in 

the conduct described in the Complaint. 

Applicants further state that they have 

adopted policies and procedures 

designed to protect the Applicants’

clients, including the Funds’

shareholders, from any conflict of 

interest that may arise between the 

Applicants’ portfolio managers and 

AIG’s other businesses referenced in the 

Complaint. Additionally, Applicants 

assert that if they were barred from 

providing services to registered 

investment companies, the effect on 

their businesses and employees would 

be severe. The Applicants state that they 

have committed substantial resources to 

support their advisory, sub-advisory and 

underwriting activities. Applicants state 

that they have not previously received 

any orders under section 9(c) of the Act. 

4. Applicants state that their inability 

to continue providing advisory services 

to the Funds and the inability to 

continue to serve as depositor or 

principal underwriter to the Funds 

would result in potential hardships for 

the Funds and their shareholders. The 

Applicants also state that they will 

distribute written materials, including 

an offer to meet in person to discuss the 

materials, to the boards of directors 

(‘‘Boards’’) of the Funds for which the 

Applicants serve as investment adviser 

or principal underwriter, including the 

directors who are not ‘‘interested 

persons,’’ as defined in section 2(a)(19) 

of the Act, of such Funds and their 

independent legal counsel, regarding 

the Injunction, any impact on the Funds 

and this application. The Applicants 

will provide such Funds’ Boards with 

all information concerning the 

Injunction and this application 

necessary for the Funds to fulfill their 

disclosure and other obligations under 

the federal securities laws. 

Applicant’s Condition 

Applicants agree that the order 

granting the requested relief will be 

subject to the following condition: 

Any temporary exemption granted 

pursuant to the application shall be 

without prejudice to, and shall not limit 

the Commission’s rights in any manner 

with respect to, any Commission 

investigation of, or administrative 

proceedings involving or against, 

Covered Persons, including without 

limitation, the consideration by the 

Commission of a permanent exemption 

from section 9(a) of the Act requested 

pursuant to the application or the 

revocation or removal of any temporary 

exemptions granted under the Act in 

connection with the application. 

Temporary Order 

The Commission has considered the 

matter and finds that Applicants have 

made the necessary showing to justify 

granting a temporary exemption. 

Accordingly, It is hereby ordered, 

pursuant to section 9(C) of the Act, that 

the Covered Persons are granted a 

temporary exemption from the 

provisions of section 9(a), effective 

forthwith, solely with respect to the 

Injunction, subject to the condition in 

the application, until the Commission 

takes final action on an application for 

a permanent order.

By the Commission. 

Jill M. Peterson, 

Assistant Secretary.

[FR Doc. 04–27311 Filed 12–13–04; 8:45 am] 

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50812; File No. SR–AMEX–

2004–81] 

Self-Regulatory Organizations; Notice 

of Filing and Order Granting 

Accelerated Approval of a Proposed 

Rule Change by the American Stock 

Exchange LLC Relating to the Listing 

and Trading of Notes Linked to the 

Performance of the Nasdaq-100 Index 

December 7, 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 October 

4, 2004, 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 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 proposal 

on an accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change

The Exchange proposed to list and 

trade notes, the performance of which is 

linked to the Nasdaq-100 Index 

(‘‘Nasdaq-100’’ or ‘‘Index’’). 

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 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Under Section 107A of the Amex 

Company Guide (‘‘Company Guide’’), 

the Exchange may approve for listing 

and trading securities that cannot be 

readily categorized under the listing 

criteria for common and preferred 

Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Notices 74545

3See Securities Exchange Act Release No. 27753 

(March 1, 1990), 55 FR 8626 (March 8, 1990) (File 

No. SR–Amex–89–29) (‘‘Approving Order’’). 4Wachovia Corporation (‘‘Wachovia’’) and The 

Nasdaq Stock Market, Inc. (‘‘Nasdaq’’) have entered 

into a non-exclusive license agreement providing 

for the use of the Nasdaq-100 by Wachovia and 

certain affiliates and subsidiaries in connection 

with certain securities including these Notes. 

Nasdaq is not responsible and will not participate 

in the issuances and creation of the Notes. 5The Nasdaq-100 is a modified capitalizationweighted index of 100 of the largest and most active 

non-financial domestic and international issues 

listed on Nasdaq. The Index is determined, 

comprised and calculated by Nasdaq without regard 

to the Notes. The Index is calculated and 

disseminated every fifteen seconds to market 

information vendors. The Exchange states that the 

Nasdaq-100 reflects the largest growth companies 

across major industry groups with all index 

components of domestic issuers having a market 

capitalization of at least $500 million and an 

average daily trading volume of at least 100,000 

shares. For foreign issuers, the worldwide market 

capitalization must be at least $10 billion with a 

U.S. market capitalization of at least $4 billion and 

an average daily trading volume of at least 200,000 

shares. In addition, no single security comprising 

the Nasdaq-100 is permitted to have more than a 

24% weighting. The nasdaq-100 was originally 

developed with a base value of 125 on February 1, 

1985. Originally a capitalization-weighted index, on 

December 21, 1998, the Nasdaq-100 changed to a 

modified capitalization-weighted index. A modified 

capitalization-weighted index is a hybrid between 

equal weighting and capitalization-weighting. This 

type of methodology is expected to: (1) retain the 

economic attributes of capitalization weighting; (2) 

promote portfolio weight diversification; (3) reduce 

Nasdaq-100 performance distortion by preserving 

the capitalization ranking of companies; and (4) 

reduce market impact on the smallest Nasdaq-100 

securities from necessary weight rebalancings. A 

quarterly examination of the Nasdaq-100 is 

performed to gauge whether requirements are not 

met, then the Index is rebalanced. These 

requirements are as follows: (1) the current weight 

of the single largest market capitalization index 

security must be less than or equal to 24%, and (2) 

the collective weight of those index securities 

whose individual current weights are in excess of 

4.5%, when added together, must be less than or 

equal to 48%. 6Section 107A of the Amex Company Guide 

requires: (1) a minimum public distribution of one 

million units; (2) a minimum of 400 shareholders; 

(3) a market value of at least $4 million; and (4) a 

term of at least one year. However, when the 

instrument will be issued in $1,000 denominations, 

as here, the minimum public distribution 

requirement of one million units and the minimum 

holder requirement of 400 holders do not apply. In 

addition, the listing guidelines provide that the 

issuer has assets in excess of $100 million, 

stockholder’s equity of at least $10 million, and pretax income of at least $750,000 in the last fiscal year 

or in two of the three prior fiscal years. In the case 

of an issuer that is unable to satisfy the earning 

criteria stated in Section 101 of the Company 

Guide, the Exchange will require the issuer to have 

the following: (1) assets in excess of $200 million 

and stockholders’ equity of at least $10 million; or 

(2) assets in excess of $100 million and 

stockholders’ equity of at least $20 million.

7The Exchange’s continued listing guidelines are 

set forth in Sections 1001 through 1003 of Part 10 

to the Exchange’s Company Guide. Section 1002(b) 

of the Company Guide states that the Exchange will 

consider removing from listing any security where, 

in the opinion of the Exchange, it appears that the 

extent of public distribution or aggregate market 

value has become so reduced to make further 

dealings on the Exchange inadvisable. With respect 

to continued listing guidelines for distribution of 

the Notes, the Exchange will rely, in part, on the 

guidelines for bonds in Section 1003(b)(iv). Section 

1003(b)(iv)(A) provides that the Exchange will 

normally consider suspending dealings in, or 

removing from the list, a security if the aggregate 

market value or the principal amount of bonds 

publicly held is less than $400,000.

8A negative return of the Nasdaq-100 will reduce 

the redemption amount at maturity with the 

potential that the holder of the Note could lose his 

entire investment. The Notes are not ‘‘principal 

protected’’ and are fully exposed to any decline in 

the level of the Nasdaq-100.

9A ‘‘market disruption event’’ is defined as the 

failure of the primary market or related markets to 

open for trading during regular trading hours or the 

occurrence or existence of any of the following 

events: (i) a trading disruption, if material, at any 

time during the one hour period that ends at the 

close of trading for the applicable exchange; (ii) an 

exchange disruption, if material, at any time during 

the one hour period that ends at the close of trading 

for the applicable exchange; or (iii) an early closure. 

A ‘‘trading disruption’’ generally means any 

suspension of, or limitation, imposed on trading by 

the primary exchange or related exchange or 

otherwise, whether by reason of movements in 

price exceeding limits permitted by the relevant 

exchange or related exchange or otherwise (i) 

relating to securities that comprise 20% or more of 

the level of the Index or (ii) in options contracts or 

futures contracts relating to the Index on any 

relevant related exchange. An ‘‘exchange 

disruption’’ means any event (other than a 

scheduled early closure) that disrupts or impairs 

the ability of market participants in general to (i) 

effect transactions in, or obtain market values on, 

any primary exchange or related exchange in 

securities that comprise 20 percent or more of the 

level of the Index or (ii) effect transactions in 

options contracts or futures contracts relating to the 

Index on any relevant related exchange. A ‘‘related 

exchange’’ is an exchange or quotation system on 

which futures or options contracts relating to the 

Index are traded.

stocks, bonds, debentures, or warrants.3

The Amex proposes to list for trading 

under Section 107A of the Company 

Guide notes linked to the performance 

of the Nasdaq-100 (the ‘‘LUNARS’’ or 

‘‘Notes’’).4 The Nasdaq-100 is 

determined, calculated and maintained 

solely by Nasdaq.5 The Notes will 

provide for a multiplier of any positive 

performance of the Nasdaq-100 during 

such term subject to a maximum 

payment amount or ceiling.

The ‘‘LUNARS’’ or ‘‘Leveraged Upside 

Indexed Accelerated Return Securities’’

will conform to the initial listing 

guidelines under Section 107A 6 and 

continued listing guidelines under 

Sections 1001–1003 7 of the Company 

Guide. The Notes are senior, nonconvertible debt securities of Wachovia. 

The Notes will have a term of not less 

than one or more than ten years. The 

original public offering price will be 

$1,000 per Note. The Notes will entitle 

the owner at maturity to receive an 

amount based upon the percentage 

change of the Nasdaq-100. At maturity, 

if the value of the Nasdaq-100 has 

increased over the term of the Notes, a 

beneficial owner will be entitled to 

receive a payment on the Notes equal to 

three (3) times the amount of that 

percentage increase, not to exceed a 

maximum payment at maturity (the 

‘‘Maximum Payment’’) to be determined 

at the time of issuance of the Notes. It 

is expected that the Maximum Payment 

will be between 116–122% of the 

principal amount, in the other words 

between $1,160 to $1,220 per $1,000 

Note. The Notes will not have a 

minimum principal amount that will be 

repaid, and accordingly, payment on the 

Notes prior to or at maturity may be less 

than the original issue price of the Notes 

because the final payment per Note will 

be exposed to the full decrease of the 

Index.8 The Notes are also not callable 

by the Issuer, or redeemable by the 

holder.

The payment that a holder or investor 

of a Note will be entitled to receive (the 

‘‘Maturity Payment’’) depends entirely 

on the relation of the value of the 

Nasdaq-100 at the close of the fifth 

scheduled trading day before the 

maturity date (the ‘‘Index Ending 

Level’’) and the closing value of the 

Index on the date the Notes are priced 

for initial sale to the public (the ‘‘Index 

Starting Level’’). In the event that the 

valuation date occurs on a non-trading 

day or if a market disruption event 9

occurs on such date, the valuation date 

will be the next trading day on which 

no market disruption event occurs.

If the Index Ending Level is greater 

than the Index Starting Level, the 

Mandatory Payment per Note will equal:

$1, . 000 1 3 0 ×+ ×  −



 

































Index Ending Level Index Starting Level

Index Starting Level

subject to the Maximum Payment. If the Index Ending Level is less than 

or equal to the Index Starting Level, the 

Maximum Payment per Note will equal:


EN14DE04.156</GPH>
74546 Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Notices 

10Approval of the Nasdaq-100 for underlying an 

option contract was originally granted to the 

Chicago Board Options Exchange (‘‘CBOE’’) in 

1994. See Securities Exchange Act Release Nos. 

33428 (January 4, 1994), 59 FR 1576 (January 11, 

1994 (approval to list and trade options on the 

Nasdaq-100); 34052 (May 12, 1994), 59 FR 25972 

(May 18, 1994) (approval to list and trade Flex 

Options on the Nasdaq-100); 40157 (July 1, 1998), 

63 FR 37426 (July 10, 1998) (approval to list and 

trade options on ETFs); 41119 (February 26, 1999), 

64 FR 11510 (March 9, 1999) (approval to list and 

trade QQQ); 43000 (June 30, 2000), 65 FR 42409 

July 10, 2000) (approval of a Reduced Value 

Nasdaq-100); and 45966 (May 20, 2002), 67 FR 

36942 (May 28, 2002) (approval to list and trade 

notes linked to the performance of the Nasdaq-100).

11Amex Rule 411 requires that every member, 

member firm or member corporation use due 

diligence to learn the essential facts, relative to 

every customer and to every order or account 

accepted.

12See Amex Rule 462 and Section 107B of the 

Company Guide.

13 15 U.S.C. 78f(b).

14 15 U.S.C. 78f(b)(5).

$1,000 1 × +  −



 



 Index Ending Level Index Starting Level

Index Starting Level

The Notes are cash-settled in U.S. 

dollars and do not give the holder any 

right to receive a portfolio security, 

dividend payments, or any other 

ownership right or interest in the 

portfolio or index of securities 

comprising the Nasdaq-100. The Notes 

are designed for investors who want to 

participate or gain exposure to the 

Nasdaq-100, subject to a cap, and who 

are willing to forgo market interest 

payments on the Notes during such 

term. The Commission has previously 

approved the listing of options on, and 

securities the performance of which 

have been linked to or based on, the 

Nasdaq-100.10

As of September 24, 2004, the market 

capitalization of the securities included 

in the Nasdaq-100 ranged from a high of 

$297.5 billion to a low of $1.4 billion. 

The average daily trading volume for 

these same securities for the last six (6) 

months, as of the same date, ranged 

from a high of 14.4 million shares to a 

low of 1 million shares. 

Because the Notes are issued in 

$1,000 denominations, the Amex’s 

existing debt floor trading rules will 

apply to the trading of the Notes. First, 

pursuant to Amex Rule 411, the 

Exchange will impose a duty of due 

diligence on its members and member 

firms to learn the essential facts relating 

to every customer prior to trading the 

Notes.11 Second, even though the 

Exchange’s debt trading rules apply, the 

Notes will be subject to the equity 

margin rules of the Exchange.12 Third, 

the Exchange will, prior to trading the 

Notes, distribute a circular to the 

membership providing guidance with 

regard to member firm compliance 

responsibilities (including suitability 

recommendations) when handling 

transactions in the Notes and 

highlighting the special risks and 

characteristics of the Notes. With 

respect to suitability recommendations 

and risks, the Exchange will require 

members, member organizations and 

employees thereof recommending a 

transaction in the Notes: (1) To 

determine that such transaction is 

suitable for the customer, and (2) to 

have a reasonable basis for believing 

that the customer can evaluate the 

special characteristics of, and is able to 

bear the financial risks of such 

transaction. In addition, Wachovia will 

deliver a prospectus in connection with 

the initial sales of the Notes.

The Exchange represents that its 

surveillance procedures are adequate to 

properly monitor the trading of the 

Notes. Specifically, the Amex will rely 

on its existing surveillance procedures 

governing equities, which have been 

deemed adequate under the Act. In 

addition, the Exchange also has a 

general policy which prohibits the 

distribution of material, non-public 

information by its employees. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6 of the Act 13 in general and 

furthers the objectives of Section 

6(b)(5) 14 in particular in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanism of a free and 

open market and a national market 

system, and, in general, protect 

investors and the public interest.

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 did not receive any 

written comments on 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. 

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 rulecomments@sec.gov. Please include SR–

Amex–2004–81 on the subject line. 

Paper comments:

• Send paper comments in triplicate 

to Jonathan G. Katz, Secretary, 

Securities and Exchange Commission, 

450 Fifth Street, NW., Washington, DC 

20549–0609.

All submissions should refer to SR–

Amex–2004–81. This file 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 Commissions 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 

Section, 450 Fifth Street, NW., 

Washington, DC 20549. Copies of such 

filing also will be available for 

inspection and copying at the principal 

office of the Amex. 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 SR–Amex–2004–81 and 

should be submitted on or before 

January 4, 2005. 

IV. Commission’s Findings and Order 

Granting Approval of Proposed Rule 

Change 

After careful consideration, the 

Commission finds that the proposed 


EN14DE04.157</GPH>
Federal Register / Vol. 69, No. 239 / Tuesday, December 14, 2004 / Notices 74547

15 Id. 16See Securities Exchange Act Release Nos. 

48152 (July 10, 2003), 68 FR 42435 (July 17, 2003) 

(approving the listing and trading of the UBS Partial 

Protection Note linked to the Index); 47983 (June 

4, 2003), 68 FR 35032 (June 11, 2003) (approving 

the listing and trading of a CSFB Accelerated 

Return Notes linked to Index); 47911 (May 22, 

2003,), 68 FR 32558 (May 30, 2003) (approving the 

listing and trading of notes (Wachovia TEES) linked 

to the Index). 17 15 U.S.C. 78f(b)(5). In approving this rule, the 

Commission notes that it has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f).

18See Company Guide Section 107A.

19See supra Note 5.

20 the issuer Wachovia disclosed in the 

prospectus that the original issue price of the Notes 

includes commissions (and the secondary market 

prices are likely to exclude commissions) and 

Wachovia’s costs of hedging its obligations under 

the Notes. These costs could increase the initial 

value of the Notes, thus affecting the payment 

investors receive at maturity. Such hedging activity 

must, of course, be conducted in accordance with 

applicable regulatory requirements.

21See Securities Exchange Act Release Nos. 

44913 (October 9, 2001), 66 FR 52469 (October 15, 

2001)(order approving the listing and trading of 

notes whose return is based on the performance of 

the Nasdaq–100 Index) (File No. SR–NASD–2001–

73); 44483 (June 27, 2001), 66 FR 35677 (July 6, 

2001) (order approving the listing and trading of 

notes whose return is based on a portfolio of 20 

securities selected from the Amex Institutional 

Index) (File No. SR–AMEX–2001); and 37744 

(September 27, 1996), 61 FR 52480 (October 7, 

1996) (order approving the listing and trading of 

notes whose return is based on a weighted portfolio 

of healthcare/biotechnology industry securities) 

(File No. SR–AMEX–96–27).

22See Securities Exchange Act Release Nos. 

45966 (May 20, 2002), 67 FR 26942 (May 28, 

2002)(approval to list and trade notes linked to the 

performance of the Nasdaq-100); 47911 (May 22, 

2003), 68 FR 32558 (May 30, 2003)(approving the 

listing and trading of notes (Wachovia TEES) linked 

to the S&P 500); 47983 (June 4, 2003), 68 FR 35032 

(June 11, 2003)(approving the listing and trading of 

a CSFB Accelerated Return Notes linked to S&P 

500); and 50019 (July 14, 2004), 69 FR 43635 (July 

21, 2004)(approving the listing and trading of 

Morgan Stanley PLUS Notes).

23 15 U.S.C. 78f(b)(5)and 78s(b)(2).

24 15 U.S.C. 78o3(b)(6) and 78s(b)(2).

25 17 CFR 300.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3 15 U.S.C. 78s(b)(3)(A).

4 17 CFR 240.19b–4.

rule change is consistent with the 

requirements of the Act and the rules 

and regulations thereunder, applicable 

to a national securities exchange, and, 

in particular, with the requirements of 

Section 6(b)(5) of the Act.15 The 

Commission has approved the listing of 

securities with a structure similar to that 

of the Notes.16 Accordingly, the 

Commission finds that the listing and 

trading of the Notes based on the Index 

is consistent with the Act and will 

promote just and equitable principles of 

trade, foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, 

and, in general, protect investors and 

the public interest consistent with 

Section 6(b)(5) of the Act.17

The requirements of Section 107A of 

the Company Guide were designed to 

address the concerns attendant to the 

trading of hybrid securities, like the 

Notes. For example, Section 107A of the 

Company Guide provides that only 

issuers satisfying substantial asset and 

equity requirements may issue 

securities such as the Note. In addition, 

the Exchange’s ‘‘Other Securities’’

listing standards further require that the 

Notes have a market value of at least $4 

million.18 The Commission also notes 

that the 100 component stocks that 

comprise the Index are reporting 

companies under the Act, and the Notes 

will be registered under Section 12 of 

the Act. Thus, by imposing the hybrid 

listing standards, suitability, disclosure, 

nad compliance requirements noted 

above, the Commission believes the 

Annex has addressed adequately the 

potential problems that could arise from 

the hybrid nature of the Notes.

In approving the product, the 

Commission recognizes that the Index is 

a modified capitalization-weighted 

index19 of 100 of the largest and most 

active non-financial domestic and 

international companies listed on 

Nasdaq. Given the large trading volume 

and capitalization of the compositions 

of the stocks underlying the Index, the 

Commission believes that the listing and 

trading of the Notes that are linked to 

the Index should not unduly impact the 

market for the underlying securities 

compromising the Index or raise 

manipulative concerns.20 Moreover, the 

issuers of the underlying securities 

comprising the Index are subject to 

reporting requirements under the Act, 

and all of the component stocks are 

either listed or traded on, or traded 

through the facilities of U.S. securities 

markets.

The Commission also believes that 

any concerns that a broker-dealer, such 

as Wachovia, or a subsidiary providing 

a hedge for the issuer, will incur undue 

position exposure are minimized by the 

size of the Notes issuance in relation to 

the net worth of Wachovia.21

Finally, the Commission notes that 

the value of the Index will be widely 

disseminated at least once every fifteen 

seconds throughout the trading day. The 

Exchange represents that the Nasdaq100 will be determined, calculated and 

maintained solely by Nasdaq. 

The Commission finds good cause for 

approving the proposed rule change 

prior to the 30th day after the date of 

publication of the notice of filing thereof 

in the Federal Register. The Exchange 

has requested accelerated approval 

because this product is similar to 

several other instruments currently 

listed and traded on the Amex.22 The 

Commission believes that the Notes will 

provide investors with an additional 

investment choice and that accelerated 

approval of the proposal will allow 

investors to begin trading the Notes 

promptly. Additionally, the Notes will 

be listed pursuant to Amex’s existing 

hybrid security listing standards as 

described above. Therefore, the 

Commission finds good cause, 

consistent with Section 19(b)(2) of the 

Act,23 to approve the proposal on an 

accelerated basis.

Conclusion 

It is therefore ordered, pursuant to 

Section 19(b)(2) of the Act,24 that the 

proposed rule change (SR–Amex–2004–

81) is hereby approved on an 

accelerated basis.

For the Commission by the Division of 

Market Regulation, pursuant to delegated 

authority.25

Jill M. Peterson, 

Assistant Secretary.

[FR Doc. 04–27312 Filed 12–13–04; 8:45 am] 

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50811; File No. SR–Amex–

2004–98] 

Self-Regulatory Organizations; 

American Stock Exchange LLC; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change to 

Temporarily Suspend the Specialist’s 

and Registered Traders’ Transaction 

Charges for the Trading of Nasdaq-100 

Index Tracking Stock 

December 7, 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 December 

1, 2004, 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, III below, which Items have 

been prepared by the Exchange. Amex 

has designated the proposed rule change 

as ‘‘establishing or changing a due, fee, 

or other charge’’ under section 

19(b)(3)(A) of the Act,3 and Rule 19b–

4(f)(2) thereunder,4 which renders the 

proposal effective upon filing with the 

Commission. The Commission is 

publishing this notice to solicit