76798 Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Notices 

3 KeySpan states that WDF, and its subsidiaries 

provide mechanical contracting services, which are 

primarily the design, construction, alteration, 

maintenance and repair of plumbing and HVAC, 

systems including related piping installation and 

welding, to large scale commercial, institutional 

and industrial customers in the New York area. 

KeySpan states that Binsky and its subsidiaries are 

specialty mechanical contractors which install 

heating, ventilating and air conditioning systems, 

which use electricity or gas, for commercial and 

industrial customers located primarily in New 

Jersey. KeySpan states that engaged in installing 

HVAC systems for commercial and industrial 

customers located primarily in New Jersey.

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

2 17 CFR 240.19b–4.

3 In Amendment No. 1, the Exchange: (1) Applied 

the proposed rule change to index options that are 

exclusively traded on Amex, (2) changed a deadline 

in the proposed rule, (3) provided that orders for 

FLEX options and accommodation trades do not 

need to be systematized prior to representation, (4) 

provided for the use of the Exchange’s ‘‘Order 

Ticket’’ enhancement to BARS as a second 

acceptable means for systematizing order, (5) 

clarified that the systemization prior to 

representation requirement applies to modifications 

and cancellations of orders, and (6) made minor 

corrections to the text of the rule and filing.

certain but is set to expire upon 

completion of the associated work 

project. In any event, KeySpan states 

that with respect to each of the KSI 

Nonutilities, none of the Guarantees, 

including any associated warranty 

period, are expected to terminate later 

than the dates set forth below:

Delta KeySpan, LLC: February 28, 2007

Granite State Plumbing & Heating, LLC: 

September 30, 2006

Northern Peabody, LLC: February 28, 

2006

KeySpan also requests that the 

Commission reserve jurisdiction over 

the maintenance, for an interim period 

of time, of certain existing Guarantees 

and other credit support mechanisms, 

previously issued under the Financing 

Order and directly related to the 

proposed divestiture of the following 

additional KSI subsidiaries: WDF Inc. 

(‘‘WDF’’), and its subsidiaries, Binsky & 

Snyder, LLC (‘‘Binsky’’) and its 

subsidiaries and Binsky and Snyder 

Service, LLC (‘‘Binsky Service’’).3

For the Commission by the Division of 

Investment Management, pursuant to 

delegated authority. 

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–27998 Filed 12–21–04; 8:45 am] 

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50866; File No. SR–Amex–

2003–90] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change by 

American Stock Exchange LLC 

Relating to the Amendment of 

Exchange Rule 153 and Amendment 

No. 1 Thereto 

December 16, 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 

9, 2003, 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 below, which Items have 

been prepared by the Exchange. On 

December 15, 2004, the Exchange 

submitted Amendment No. 1 to the 

proposed rule change.3 The Commission 

is publishing this notice to solicit 

comments on the proposed rule change 

from interested persons.

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Amex proposes to amend its Rule 

153 relating to the creation of an 

electronic audit trail. The text of the 

proposal rule change is set forth below. 

New text is in italics; deletions are in 

brackets.

* * * * *

Record of Orders 

Rule 153. (a) Every member or 

member organization shall maintain a 

record of every order and every 

modification and cancellation of such 

order transmitted to the Floor of the 

Exchange, which record shall include 

the name, amount and price of the 

security and the time when such order, 

modification or cancellation was so 

transmitted. 

(b) Every member or member 

organization shall maintain a record of 

every order and every modification and 

cancellation of such order received by 

such member or member organization 

on the Floor of the Exchange. Such 

record shall include the name, amount 

and price of the security and the time 

when such order, modification or 

cancellation was received. With respect 

to orders that are eligible for input into 

the Exchange’s electronic order 

processing facilities, members and 

member organizations shall comply 

with their record keeping obligations 

under this Rule by inputting 

immediately upon receipt eligible 

orders, modifications and cancellations 

that are not already systematized into 

the Exchange’s electronic order 

processing facilities and retaining the 

record of such orders provided to them 

by the Exchange for this purpose. 

(c) Rescinded. 

(d) Every member or member 

organization shall preserve for at least 

three years a record of every 

commitment or obligation to trade 

issued from the Floor and cancellation 

thereof, which record shall include the 

name, amount, and price of the security, 

the destination market center, and the 

time when such commitment was 

issued or cancelled. 

(e) Every member or member 

organization shall maintain for at least 

three years a record of every order and 

every modification and cancellation of 

such order entered into the After-Hours 

Trading Facility (as Rule 1300 (AfterHours Trading: Applicability and 

Definitions) defines that term), which 

record shall include the name and 

amount of the security, the terms of the 

order, the time when it was so entered, 

and the time at which a report of 

execution was received. Every specialist 

shall maintain for at least three years 

reports of all executions and 

modification and cancellations of orders 

placed with the specialist through the 

After-Hours Trading Facility.

(f) Every member or member 

organization shall maintain a record for 

at least three years of every report of the 

execution of an order, commitment or 

obligation covered by paragraph (a), (b), 

(d) or (e) of this rule in addition to the 

record required by such paragraphs, 

which shall include the time of the 

receipt of such report. 

(g) Before any order, commitment or 

obligation covered by paragraph (a), (b), 

(d) or (e) of this rule is executed, there 

shall be placed upon the order slip or 

other record the name or designation of 

the account for which such order, 

commitment or obligation is to be 

executed; no change in such account 

name or designation shall be made 

unless the change has been authorized 

by any member or officer in the member 

organization or authorized 

representative thereof who shall, prior 

to giving his approval of such change, 

be personally informed of the essential 

facts relative thereto and shall indicate 

his approval of such change in writing 

on the order. 

(h) All records required to be 

maintained under this rule shall include 

such information and shall be preserved 

for such period as required by the 

Securities Exchange Act of 1934 and the 

rules thereunder relating to the 

requirements for the retention of orders. 

(i) The term ‘‘order’’ as used in this 

Rule 153 includes any modification to 

or cancellation of such order. 

* * * Commentary

Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Notices 76799

4See Exchange Act Release No. 45782 (April 18, 

2002), 67 FR 20559 (April 25, 2002). BARS is an 

order routing system that allows brokers to manage 

and route orders for Amex traded securities. BARS 

also has a ‘‘Market Look’’ functionality that allows 

floor brokers to transmit information to booth clerks 

by means of time stamped JPEG files. The Exchange 

maintains these files.

5See, Exchange Act Release No. 34–45794 (April 

22, 2002), 67 FR 20849 (April 26, 2002).

.01 Consolidated Options Audit 

Trail System Requirements—NonSystem Orders—COATS Phase V—. The 

Exchange has undertaken with the other 

options exchanges to build a 

Consolidated Options Audit Trail 

System (COATS) which, when fully 

implemented, will provide an accurate, 

time-sequenced record of electronic and 

other orders, quotations and 

transactions in listed options on the 

exchanges. Rule 153(b) currently 

requires members and member 

organizations to systematize 

‘‘immediately upon receipt’’ orders 

‘‘that are eligible for input into the 

Exchange’s electronic order processing 

facilities’’ if such orders are not already 

systematized in the Exchange’s 

electronic order processing facilities. 

Commencing on January 10, 2005, 

members and member organizations 

must systematize in BARS those options 

orders and modifications and 

cancellations of such orders that are not 

already systematized in an Amex 

system prior to representing the order in 

the crowd. Members and member 

organizations also must record in BARS 

immediately upon receipt information 

pertaining to the execution of option 

orders.

The Exchange currently is developing 

an enhancement to its BARS system 

(called ‘‘Order Ticket’’) to facilitate 

order systemization by floor brokers and 

their clerks. This enhancement will be 

available by the end of the first quarter 

in 2005. The Order Ticket enhancement 

will allow members and member 

organizations to create electronic, time 

stamped, handwritten order tickets 

which will be saved by the Exchange as 

JPEG files. This enhancement, when 

implemented, will provide members and 

member organizations with a second 

acceptable means for complying with 

their COATS Phase V obligation to 

systematize orders prior to 

representation. The following 

information must be recorded in an 

Order Ticket if this enhancement is used 

to record an option order prior to 

representing it:

• Buy/Sell

• Symbol

• Quantity

• Call/Put (calls are assumed unless 

‘‘P’’ is written)

• Expiration

• Strike (fractions are assumed, e.g., 

‘‘221⁄2’’ should be written as ‘‘22’’)

• Price term (a limit order is assumed 

if a price is written, e.g., ‘‘1.20’’ means 

a 1.20 limit. Market orders are blank or 

represented by a dash)

• Contingencies (if applicable, e.g., 

NH, AON, FOK, IOC)

• Open/Close (close is assumed 

unless ‘‘O’’ is written)

• Customer/Firm/Member Market 

Maker/Non-Member Market Maker 

(customer is assumed unless ‘‘F’’, ‘‘P’’ or 

‘‘N’’ is written.)

• Give up

At the first mark on the Order Ticket, 

the Exchange’s systems will 

automatically time stamp the ticket. 

When a broker or clerk finishes entering 

the information on the Order Ticket, he 

or she should hit a ‘‘save’’ button, and 

the Order Ticket will be assigned a 

specific sequence number. Once the 

‘‘save’’ button is hit, the Order Ticket 

cannot be modified and is stored by the 

Exchange as a JPEG file. After the Order 

Ticket is saved, a broker or clerk must 

enter the order information into BARS 

as soon as possible, and the Order 

Ticket enhancement will transfer both 

the time stamp and the sequence 

number from the Order Ticket into 

BARS. Brokers and their clerks also 

must enter information relating to any 

modification or cancellation of an order 

into BARS prior to representing the 

revised order in the crowd. Brokers and 

their clerks must record in BARS 

immediately upon receipt information 

pertaining to the execution of option 

orders.

Any proprietary system approved by 

the Exchange on the Exchange’s trading 

floor which receives orders will be 

considered an Exchange system for the 

purpose of systematizing those options 

orders and modifications and 

cancellations of such orders that are not 

already systematized in an Amex 

system prior to representing the orders 

in the crowd. Any proprietary system 

approved by the Exchange shall have 

the functionality to comply with the 

requirements of COATS.

Members and member organizations 

do not need to systematize orders for 

accommodation trades (Rule 959) or 

FLEX options (Rules 900G through 

909G) prior to representing the orders in 

the crowd. Information about these 

orders must be submitted to the 

Exchange on trade date no later than 

ten minutes after the close of trading. 

The Exchange will maintain information 

submitted to it pertaining to FLEX 

option and accommodation trades in 

the COATS format.

* * * * *

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 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange has undertaken with 

the other options exchanges to build a 

Consolidated Options Audit Trail 

System (‘‘COATS’’) which, when fully 

implemented, will provide an accurate, 

time-sequenced record of electronic and 

other orders, quotations and 

transactions in listed options on the 

exchanges. In connection with the 

implementation of COATS, the 

Exchange has modified its Booth 

Automated Routing System (‘‘BARS’’) 4

to accept option order types that are not 

otherwise eligible for input into the 

Exchange’s order routing facilities (e.g.,

complex orders) so that members and 

member organizations may systematize 

these orders, and the Exchange can 

integrate them into COATS. The 

Exchange also is in the process of 

developing a further enhancement to 

BARS called Order Ticket, which, when 

implemented, the Exchange believe will 

provide a second acceptable means for 

brokers and clerks to comply with their 

COATS Phase V obligation to 

systematize orders prior to 

representation.

Amex Rule 153(b) currently requires 

members and member organizations to 

systematize ‘‘immediately upon receipt’’

orders, and modifications or 

cancellations of orders, ‘‘that are eligible 

for input into the Exchange’s electronic 

order processing facilities’’ if such 

orders are not already systematized in 

the Exchange’s electronic order 

processing facilities.5 To comply with 

the COATS standard for an accurate 

time sequencing of option orders, 

transactions and quotations, the 

Exchange is proposing that members 

and member organizations should 

systematize, prior to representation, 

either in BARS or in the Order Ticket 

76800 Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Notices 

6COATS Phase V obligates the options exchanges 

to ‘‘incorporate into the audit trail all nonelectronic orders such that the audit trail provides 

an accurate, time sequenced record of electronic 

and other orders, quotations and transactions * * * 

beginning with the receipt of an order * * * and 

further documenting the life of the order through 

the process of execution, partial execution, or 

cancellation of that order, which audit trail shall be 

readily retrievable in the common computer 

format.’’

7The Exchange recognizes the need for effective 

and proactive surveillance for activities such as 

trading ahead and frontrunning. It currently 

conducts surveillance for such activities and will 

incorporate a review of order systemization as part 

of such surveillance. The Exchange also intends to 

implement supplementary surveillance and 

examination programs related to the systemization 

of order requirement promptly after this 

requirement is instituted, and which will support, 

among other things, trading ahead and frontrunning 

surveillances.

8 15 U.S.C 78f(b).

9 15 U.S.C. 78f(b)(5).

enhancement to BARS described below, 

those options orders and modifications 

and cancellations of such orders that are 

not already systematized in an Amex 

system. The obligation to systematize 

orders prior to representation would 

commence on January 120, 2006.6

In the case of an order that is not 

systematized when it reaches the 

Exchange, a floor broker or a broker’s 

clerk would systematize the order by (1) 

opening an Order Entry Template 

(‘‘OET’’) on the Exchange’s BARS booth 

or hand held terminal, (2) entering the 

order terms into the OET, and (3) 

transmitting the order to the Amex 

Order File (‘‘AOF’’). The first keystroke 

in the OET would be captured by the 

Exchange’s systems as the time of order 

receipt. Brokers and their clerks also 

would enter information relating to any 

modification, cancellation or execution 

of an order into BARS. The Exchange 

incorporates order and execution 

information in the AOF into the COATS 

file. In addition to entering a nonsystem order directly into BARS, the 

Amex has designed an enhancement to 

the BARS system (called ‘‘Order 

Ticket’’) to facilitate order systemization 

by floor brokers and their clerks. The 

Exchange anticipates that the Order 

Ticket enhancement will be available by 

the end of the first quarter of 2005. The 

Order Ticket enhancement will allow 

floor brokers and their clerks to create 

electronic, time stamped, handwritten 

order tickets which will be saved by the 

Exchange as JPEG files.

A broker or clerk who wants to use 

the BARS order Ticket enhancement 

would select a new ‘‘Order Ticket’’

button on the booth or hand held BARS 

terminal. This would create a blank 

image template on a screen that already 

exists on both the booth and hand held 

BARS terminals Brokers and their clerks 

would write on the screen with a stylus 

and, in this manner, record order terms 

just as if they were using a paper order 

ticket. A person using the Order Ticket 

enhancement would be required to 

record the following order terms on the 

ticket prior to representing the order in 

the trading crowd. 

• Buy/Sell. 

• Symbol. 

• Quantity. 

• Call/Put (calls would be assumed 

unless ‘‘P’’ is written). 

• Expiration. 

• Strike (fractions would be assumed 

e.g., ‘‘221⁄2’’ would be written as ‘‘22’’). 

• Price term (a limit order would be 

assumed if a price were written, e.g.,

‘‘1.20’’ would mean a 1.20 limit. Market 

orders would be blank or represented by 

a dash). 

• Contingencies (if applicable, e.g.,

NH, AON, FOK, IOC, stock). 

• Open/Close (close would be 

assumed unless ‘‘O’’ is written). 

• Customer/Firm/Member Market 

Maker/Non-Member Market Maker 

(customer would be assumed unless 

‘‘F,’’ ‘‘P’’ or ‘‘N’’ is written.). 

• Give-up. 

At the first mark on the template, the 

Order Ticket would be automatically 

time stamped by the Exchange’s systems 

to the nearest second. When the broker 

or clerk finishes entering the 

information on the Order Ticket, he or 

she would hit a ‘‘save’’ button, and the 

Order Ticket would be assigned a 

specific sequence number. Once the 

‘‘save’’ button is hit, the Order Ticket 

could not be modified and would be 

stored by the Exchange as a JPEG file. 

Once the order is systematized in 

Order Ticket, the member or member 

organization that accepted the order 

must transfer the order terms into BARS 

so that a record of the order may be 

maintained in the Exchange’s AOF 

system and any trade information 

submitted to comparison. In order to 

enter the order into BARS, a floor broker 

or clerk would open a BARS OET on a 

saved Order Ticket by selecting a new 

OET button within the image. This 

would cause both the time stamp and 

the sequence number from the Order 

Ticket to be automatically transferred 

from the Order Ticket to the OET. The 

transfer of the time stamp and sequence 

number would be done by the 

Exchange’s systems and could not be 

modified by the broker or clerk. The 

broker or clerk then would enter the 

required order terms into the OET and 

transmit the order to AOF. The broker 

or clerk also would enter any 

information pertaining to a modification 

or cancellation of an order, or the 

execution of an order, firectly into 

BARS from where it would be 

transmitted to AOF. Information 

pertaining to order modifications and 

cancellations would have to be 

systemized prior to representation of the 

revised order in the crowd. As 

previously noted, order information in 

AOF is incorporated into the COATS 

file.

Any proprietary system approved by 

the Exchange on the Exchange’s trading 

floor which receives orders will be 

considered an Exchange system for the 

purpose of systematizing those options 

orders and modifications and 

cancellations of such orders that are not 

already systematized in an Amex system 

prior to representing the orders in the 

crowd. Any proprietary system 

approved by the Exchange shall have 

the functionality to comply with the 

requirements of COATS. 

Orders for FLEX options and 

accommodation trades would not have 

to be systematized prior to 

representation. Information about these 

orders would be submitted to the 

Exchange on trade date no later than 10 

minutes after the close of trading. The 

Exchange will maintain information 

submitted to it pertaining to FLEX 

option and accommodation trades in the 

COATS format. 

The Exchange believes that the 

systemization of options orders directly 

into BARS or through the Order Ticket 

enhancement to BARS (once it is 

available) both would provide 

acceptable means for brokers and clerks 

to comply with their COATS Phase V 

obligation to systematize orders prior to 

representation. The Order Ticket 

enhancement, moreover, would 

facilitate COATS Phase V compliance 

by persons who are unfamiliar with 

keyboard style data entry because Order 

Ticket uses handwriting on an 

electronic pad similar to the traditional 

paper order tickets. 7

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

Section 6(b) of the Act 8 in general and 

furthers the objectives of Section 

6(b)(5) 9 in particular in that the 

proposed rule change is designed to 

prevent fraudulent and manipulative 

acts and practices, 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; and is not designed to 

Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Notices 76801

10 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3Amendment No. 1 replaced the original 

proposed rule change in its entirety.

permit unfair discrimination between 

customers, issuers, brokers and dealers.

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 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 

No written comments were solicited 

or received with respect to 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, as amended, 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 File 

Number SR–Amex–2003–90 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 File 

Number SR–Amex–2003–90. 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 

Section, 450 Fifth Street, NW., 

Washington, DC 20549. Copies of such 

filing also will be available for 

inspection and copying at the principal 

offices 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 File Number SR–Amex–

2003–90 and should be submitted on or 

before January 12, 2005.

For the Commission by the Division of 

Market Regulation, pursuant to delegated 

authority.10

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–27969 Filed 12–21–04; 8:45 am] 

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–50871; File No. SR–Amex–

2004–72] 

Self-Regulatory Organizations; Notice 

of Filing of Proposed Rule Change and 

Amendment No. 1 Thereto by the 

American Stock Exchange LLC To 

Amend Its Minor Rule Violation Plan 

December 16, 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 August 

23, 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, and III below, which Items 

have been prepared by the Exchange. 

On November 23, 2004, Amex filed 

Amendment No. 1 to the proposed rule 

change.3 The Commission is publishing 

this notice to solicit comments on the 

proposed rule change, as amended, from 

interested persons.

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

Amex proposes to amend Exchange 

Rule 590, its Minor Rule Violation Fine 

Plan (‘‘Plan’’). The text of the proposed 

rule change is available at Amex’s Office 

of the Secretary and at the 

Commission’s Public Reference Room. 

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, as amended, 

and discussed any comments it 

received. The text of these statements 

may be examined at the places specified 

in Item IV 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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

The Exchange has had the Plan since 

1976 which provides a simplified 

procedure for the resolution of minor 

rule violations. Codified in Amex Rule 

590, the Plan has three distinct parts: 

Part 1 (‘‘General Rule Violations’’) 

covers more substantive matters that, 

nonetheless, are deemed ‘‘minor’’ by 

Amex; Part 2 (‘‘Floor Decorum’’) covers 

floor decorum and operational matters; 

and Part 3 (‘‘Reporting Violations’’) 

covers the late submission of routine 

reports. 

Amex is proposing to amend Part 1 of 

Amex Rule 590 to bring additional rules 

within its coverage. Amex believes that 

inclusion of such matters within Part 1 

of Amex Rule 590 would provide a fair 

means of prompt resolution of minor 

rule violations that do not rise to the 

level of a formal enforcement action. 

Specifically, Amex is proposing to add 

the following violations to Part 1 of 

Amex Rule 590: 

(i) Failure to comply with trade 

reporting requirements for options 

(Amex Rule 992 requires the member 

initiating the options transaction to 

report, or ensure the transaction is 

reported, within 90 seconds of the