Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Notices 6345

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 27753 

(March 1, 1990), 55 FR 8624 (March 8, 199) (order 

approving File No. SR–Amex–89–29).

4Telephone conference between Jeffrey P. Burns, 

Associate General Counsel, Amex, and Florence E. 

Harmon, Senior Special Counsel, Division of 

Market Regulation, Commission (January 5, 2004).

5SOC is a wholly-owned special purpose entity 

of J.P. Morgan Securities Holdings Inc. and the 

registrant under the Form S–3 Registration 

Statement (No. 333–67188) under which the 

securities will be issued.

6The initial listing standards for the ABS 

Securities require: (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, if traded in thousand dollar 

denominations, then there is no minimum holder 

requirement. In addition, the listing guidelines 

provide that the issuer have assets in excess of $100 

million, stockholder’s equity of at least $10 million, 

and pre-tax 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 which is unable to satisfy 

the earning criteria stated in Section 101 of the 

Company Guide, the Exchange pursuant to section 

107A of the Company Guide 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 ABS Securities, the Exchange will rely 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 GSE Security is a security that is issued by 

a government-sponsored entity such as Federal 

National Mortgage Association (‘‘Fannie Mae’’), 

Federal Home Loan Mortgage Corporation (‘‘Freddie 

Mac’’), Student Loan Marketing Association (‘‘Sallie 

Mae’’), the Federal Home Loan Banks and the 

Federal Farm Credit Banks. All GSE debt is 

sponsored but not guaranteed by the Federal 

government, whereas government agencies such as 

Government National Mortgage Association 

(‘‘Ginnie Mae’’) are divisions of the United States 

government whose securities are backed by the full 

faith and credit of the United States.

9A stripped fixed income security, such as a 

Treasury Security or GSE Security, is a security that 

Continued

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–49136; File No. SR–Amex–

2003–99] 

Self-Regulatory Organizations; Notice 

of Filing and Order Granting 

Accelerated Approval of Proposed 

Rule Change by American Stock 

Exchange LLC Relating to Trust 

Certificates Linked to a Basket of 

Investment Grade Fixed Income 

Securities 

January 28, 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 November 

19, 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, and III below, which items 

have been prepared by 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 proposes to approve for 

listing and trading under section 107A 

of the Amex Company Guide 

(‘‘Company Guide’’), trust certificates 

linked to a basket of investment grade 

fixed income debt instruments. 

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 the 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

Under section 107A of the Amex 

Company Guide, the Exchange may 

approve for listing and trading securities 

which cannot be readily categorized 

under the listing criteria for common 

and preferred stocks, bonds debentures, 

or warrants. 3 The Amex proposes to list 

for trading under section 107A of the 

Company Guide, the ABS Securities. 

The Exchange proposed to list and trade 

under section 107A of the Company 

guide, asset-backed securities (‘‘ABS 

Securities’’) representing ownership 

interests in the Select Notes Trust 2004–

014 (‘‘Trust’’), a special purpose trust to 

be formed by Structured Obligations 

Corporation (‘‘SOC’’),5 and the trustee of 

the Trust pursuant to a trust agreement, 

which will be entered into on the date 

that the ABS Securities are issued. The 

assets of the Trust will consist primarily 

of a basket or portfolio of up to 

approximately twenty-five (25) 

investment-grade fixed-income 

securities (‘‘Underlying Corporate 

Bonds’’) and United States Department 

of Treasury STRIPS or securities issued 

by the United States Department of the 

Treasury (‘‘Treasury Securities’’) or 

government sponsored entity securities 

(‘‘GSE Securities’’). In the aggregate, the 

component securities of the basket or 

portfolio will be referred to as the 

‘‘Underlying Securities.’’

The ABS Securities will conform to 

the initial listing guidelines under 

section 107A 6 and continued listing 

guidelines under sections 1001–10037 of 

the Company Guide. At the time of 

issuance, the ABS Securities will 

receive an investment grade rating from 

a nationally recognized securities rating 

organization (‘‘NRSRO’’). The issuance 

of the ABS Securities will be a 

repackaging of the Underlying Corporate 

Bonds together with the addition of 

either Treasury Securities or GSE 

Securities,8 with the obligation of the 

Trust to make distributions to holders of 

the ABS Securities depending on the 

amount of distributions received by the 

Trust on the Underlying Securities.

However, due to the pass-through and 

passive nature of the ABS Securities, the 

Exchange intends to rely on the assets 

and stockholder equity of the issuers of 

the Underlying Corporate Bonds as well 

as GSE Securities, rather than the Trust 

to meet the requirement in section 107A 

of the Company Guide. The corporate 

issuers of the Underlying Corporate 

Bonds and GSE Securities will meet or 

exceed the requirements of section 107A 

of the Company Guide. The distribution 

and principal amount/aggregate market 

value requirements found in sections 

107A(b) and (c), respectively, will 

otherwise be met by the Trust as issuer 

of the ABS Securities. In addition, the 

Exchange for purposes of including 

Treasury Securities will rely on the fact 

that the issuer is the United States 

government rather than the asset and 

stockholder tests found in section 107A. 

The basket of Underlying Securities 

will not be managed and will generally 

remain static over the term of the ABS 

Securities. Each of the Underlying 

Securities provide for the payment of 

interest on a semi-annual basis, but the 

ABS Securities will provide for monthly 

or quarterly distributions of interest. 

Neither the Treasury Securities or GSE 

Securities will make periodic payments 

of interest.9 The Exchange represents 

6346 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Notices 

is separated into its periodic interest payments and 

principal repayment. The separate strips are then 

sold individually as zero coupon securities 

providing investors with a wide choice of 

alternative maturities.

10Pursuant to the Interest Distribution 

Agreement, shortfalls in the amounts available to 

pay monthly or quarterly interest to holders of the 

ABS Securities due to the Underlying Securities 

paying interest semi-annually will be made to the 

Trust by JP Morgan Chase Bank or one of its 

affiliates and will be repaid out of future cash flow 

received by the Trust from the Underlying 

Securities.

11The Underlying Securities may drop out of the 

basket upon maturity or upon payment default or 

acceleration of the maturity date for any default 

other than payment default. See Prospectus for a 

schedule of the distribution of interest and of the 

principal upon maturity of each Underlying 

Security and for a description of payment default 

and acceleration of the maturity date.

12See Securities Exchange Act Release Nos. 

48791 (November 17, 2003), 68 FR 65750 

(November 21, 2003) (File No. SR–Amex–2003–92); 

48312 (August 8, 2003), 68 FR 48970 (August 15, 

2003) (File No. SR–Amex–2003–69); 47884 (May 

16, 2003), 68 FR 28305 (May 23, 2003) (File No. SR–

Amex–2003–37); 47730 (April 24, 2003), 68 FR 

23340 (May 1, 2003) (File No. SR–Amex–2003–25); 

46923 (November 27, 2002), 67 FR 72247 

(December 4, 2002) (File No. SR–Amex–2002–92); 

and 46835 (November 14, 2002), 67 FR 70271 

(November 21, 2002) (File No. SR–Amex–2002–70).

13The prices of Underlying Securities generally 

will be determined by one or more market makers 

in accordance with applicable law and Exchange’s 

rules.

14See Securities Exchange Act Release No. 43873 

(January 23, 2001), 66 FR 8131 (January 29, 2001) 

(File No. SR–NASD–99–65). Investors are able to 

access TRACE information at http://

www.nasdbondinfo.com/.

15Corporate prices are available at 20-minute 

intervals from Capital Management Services at 

http://www.bondvu.com/.

that, to alleviate this cash flow timing 

issue, the Trust will enter into an 

interest distribution agreement 

(‘‘Interest Distribution Agreement’’) as 

described in the prospectus supplement 

related to the ABS Securities 

(‘‘Prospectus Supplement’’).10 Principal 

distributions on the ABS Securities are 

expected to be made on dates that 

correspond to the maturity dates of the 

Underlying Securities, (i.e., the 

Underlying Corporate Bonds and 

Treasury Securities or GSE Securities). 

However, some of the Underlying 

Securities may have redemption 

provisions and in the event of an early 

redemption or other liquidation (e.g., 

upon an event of default) of the 

Underlying Securities, the proceeds 

from such redemption (including any 

make-whole premium associated with 

such redemption) or liquidation will be 

distributed pro rata to the holders of the 

ABS Securities. Each Underlying 

Corporate Bond will be issued by a 

corporate issuer and purchased in the 

secondary market.

In the case of Treasury Securities, the 

Trust will either purchase the securities 

directly from primary dealers or in the 

secondary market, which consists of 

primary dealers, non-primary dealers, 

customers, financial institutions, nonfinancial institutions and individuals. 

Similarly, in the case of GSE Securities, 

the trust will either purchase the 

securities directly from the issuer or in 

the secondary market.

Holders of the ABS Securities 

generally will receive interest on the 

face value in an amount to be 

determined at the time of issuance of 

the ABS Securities and disclosed to 

investors. The rate of interest payments 

will be based upon prevailing interest 

rates at the time of issuance and made 

to the extent that coupon payments are 

received from the Underlying Securities. 

Distributions of interest will be made 

monthly or quarterly. Investors will also 

be entitled to be repaid the principal of 

their ABS Securities from the proceeds 

of the principal payments on the 

Underlying Securities.11 The payout or 

return to investors on the ABS 

Securities will not be leveraged.

The ABS Securities will mature on 

the latest maturity date of the 

Underlying Securities. Holders of the 

ABS Securities will have no direct 

ability to exercise any of the rights of a 

holder of an Underlying Corporate 

Bond; however, holders of the ABS 

Securities as a group will have the right 

to direct the Trust in its exercise of its 

rights as holder of the Underlying 

Securities. 

The proposed ABS Securities are 

virtually identical to Select Notes Trust 

2003–02, 2003–03, 2003–04 and 2003–

05 previously approved by the 

Commission.12 The only difference 

being the actual Underlying Securities 

in the basket of investment grade fixedincome securities. Accordingly, the 

Exchange proposes to provide for the 

listing and trading of the ABS Securities 

where the Underlying Securities meet 

the Exchange’s Bond and Debenture 

Listing Standards set forth in section 

104 of the Amex Company Guide. The 

Exchange represents that all of the 

Underlying Securities in the proposed 

basket will meet or exceed these listing 

standards.

The Exchange’s Bond and Debenture 

Listing Standards in Section 104 of the 

Company Guide provide for the listing 

of individual bond or debenture 

issuances provided the issue has an 

aggregate market value or principal 

amount of at least $5 million and any 

of: (1) The issuer of the debt security has 

equity securities listed on the Exchange 

(or on the New York Stock Exchange 

(‘‘NYSE’’) or on the Nasdaq National 

Market (‘‘Nasdaq’’)); (2) an issuer of 

equity securities listed on the Exchange 

(or on the NYSE or on the Nasdaq) 

directly or indirectly owns a majority 

interest in, or is under common control 

with, the issuer of the debt security; (3) 

an issuer of equity securities listed on 

the Exchange (or on the NYSE or on the 

Nasdaq) has guaranteed the debt 

security; (4) an NRSRO has assigned a 

current rating to the debt security that 

is no lower than an S&P Corporation 

(‘‘S&P’’) ‘‘B’’ rating or equivalent rating 

by another NRSRO; or (5) or if no 

NRSRO has assigned a rating to the 

issue, an NRSRO has currently assigned 

(i) an investment grade rating to an 

immediately senior issue or (ii) a rating 

that is no lower than a S&P ‘‘B’’ rating 

or an equivalent rating by another 

NRSRO to a pari passu or junior issue.

In addition to the Exchange’s Bond 

and Debenture Listing Standards, an 

Underlying Security must also be of 

investment grade quality as rated by an 

NRSRO and at least 75% of the 

underlying basket is required to contain 

Underlying Securities from issuances of 

$100 million or more. The maturity of 

each Underlying Security is expected to 

match the payment of principal of the 

ABS Securities with the maturity date of 

the ABS Securities being the latest 

maturity date of the Underlying 

Securities. Amortization of the ABS 

Securities will be based on (1) the 

respective maturities of the Underlying 

Securities, including Treasury 

Securities or GSE Securities, (2) 

principal payout amounts reflecting the 

pro-rata principal amount of maturing 

Underlying Securities, and (3) any early 

redemption or liquidation of the 

Underlying Securities, including 

Treasury Securities or GSE Securities. 

Investors will be able to obtain the 

prices for the Underlying Securities 

through Bloomberg L.P. (‘‘Bloomberg’’) 

or other market vendors, including the 

broker-dealer through whom the 

investor purchased the ABS 

Securities.13 In addition, the Bond 

Market Association (‘‘TBMA’’) provides 

links to price and other bond 

information sources on its investor Web 

site at www.investinginbonds.com. 

Transaction prices and volume data for 

the most actively traded bonds on the 

exchanges are also published daily in 

newspapers and on a variety of financial 

Web sites. The National Association of 

Securities Dealers, Inc. (‘‘NASD’’) Trade 

Reporting and Compliance Engine 

(‘‘TRACE’’) will also help investors 

obtain transaction information for the 

most active corporate debt securities, 

such as investment grade corporate 

bonds.14 For a fee, investors can have 

access to intra-day bellwether quotes.15

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Notices 6347

16 ‘‘Valuation Prices’’ refer to an estimated price 

that has been determined based on an analytical 

evaluation of a bond in relation to similar bonds 

that have traded. Valuation prices are based on 

bond characteristics, market performance, changes 

in the level of interest rates, market expectations 

and other factors that influence a bond’s value.

17Amex 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.

18See Amex Rule 462.

19 15 U.S.C. 78f(b).

20 15 U.S.C. 78f(b)(5).

21 Id.

22See supra note 12.

23 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).

24See supra note 9.

Price and transaction information for 

Treasury Securities and GSE Securities 

may also be obtained at http://

publicdebt.treas.gov and http://

www.govpx.com, respectively. Price 

quotes are also available to investors via 

proprietary systems such as Bloomberg, 

Reuters and Dow Jones Telerate. 

Valuation prices 16 and analytical data 

may be obtained through vendors such 

as Bridge Information Systems, Muller 

Data, Capital Management Sciences, 

Interactive Data Corporation and Barra.

The ABS Securities will be listed in 

$1,000 denominations with the 

Exchange’s existing debt floor trading 

rules applying to trading. 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 ABS Securities.17

Second, the ABS Securities will be 

subject to the debt margin rules of the 

Exchange.18 Third, the Exchange will, 

prior to trading the ABS Securities, 

distribute a circular to the membership 

providing guidance with regard to 

member firm compliance 

responsibilities (including suitability 

recommendations) when handling 

transactions in the ABS Securities and 

highlighting the special risks and 

characteristics of the ABS Securities. 

With respect to suitability 

recommendations and risks, the 

Exchange will require members, 

member organizations and employees 

thereof recommending a transaction in 

the ABS Securities: (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.

The Exchange represents that its 

surveillance procedures are adequate to 

properly monitor the trading of the ABS 

Securities. Specifically, the Amex will 

rely on its existing surveillance 

procedures governing debt, 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 19 in general and 

furthers the objectives of section 

6(b)(5) 20 in particular in that it is 

designed to prevent fraudulent and 

manipulative acts and practices, 

promote just and equitable principles of 

trade, remove impediments to and 

perfect the mechanisms 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. 

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–2003–99. 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 

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 Amex. All 

submissions should refer to the File No. 

SR–Amex–2003–99 and should be 

submitted by March 2, 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, and, in 

particular, with the requirements of 

section 6(b)(5) of the Act.21 The 

Commission finds that this proposal is 

similar to several approved equitylinked instruments currently listed and 

traded on the Amex.22 Accordingly, the 

Commission finds that the listing and 

trading of the ABS Securities 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.23

As described more fully above, the 

ABS Securities are asset-backed 

securities and represent a repackaging of 

the Underlying Corporate Bonds 

together with the addition of either 

Treasury Securities or GSE Securities, 

subject to certain distribution of interest 

obligations of the Trust. The ABS 

Securities are not leveraged 

instruments. The ABS Securities are 

debt instruments whose price will still 

be derived and based upon the value of 

the Underlying Securities. The 

Exchange represents that the value of 

the Underlying Securities will be 

determined by one or more market 

makers, in accordance with Exchange 

rules. Investors are guaranteed at least 

the principal amount that they paid for 

the Underlying Securities. In addition, 

each of the Underlying Corporate Bonds 

will pay interest on a semi-annual basis 

while the ABS securities themselves 

will pay interest on a monthly or 

quarterly basis, pursuant to the Interest 

Distribution Agreement. Neither the 

Treasury Securities or GSE Securities 

will make periodic payments of 

interest.24 In addition, the ABS 

6348 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Notices 

25See Company Guide section 107A.

26The ABS Securities will be registered under 

section 12 of the Act. 27See supra note 12.

28 15 U.S.C. 78f(b)(5) and 78s(b)(2).

29 15 U.S.C. 78o–3(b)(6) and 78s(b)(2).

30 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

securities will mature on the latest 

maturity date of the Underlying 

Securities. However, due to the passthrough nature of the ABS Securities, 

the level of risk involved in the 

purchase or sale of the ABS Securities 

is similar to the risk involved in the 

purchase or sale of traditional common 

stock.

The Commission notes that the 

Exchange’s rules and procedures that 

address the special concerns attendant 

to the trading of hybrid securities will 

be applicable to the ABS Securities. In 

particular, by imposing the hybrid 

listing standards, suitability, disclosure, 

and compliance requirements noted 

above, the Commission believes the 

Exchange has addressed adequately the 

potential problems that could arise from 

the hybrid nature of the ABS Securities. 

Moreover, the Commission notes that 

the Exchange will distribute a circular 

to its membership calling attention to 

the specific risks associated with the 

ABS Securities. 

The Commission notes that the ABS 

Securities are dependent upon the 

individual credit of the issuers of the 

Underlying Securities. To some extent 

this credit risk is minimized by the 

Exchange’s listing standards in section 

107A of the Company Guide which 

provide that only issuers satisfying asset 

and equity requirements may issue 

securities such as the ABS Securities. In 

addition, the Exchange’s ‘‘Other 

Securities’’ listing standards further 

provide that there is no minimum 

holder requirement if the securities are 

traded in thousand dollar 

denominations.25 The Commission 

notes that the Exchange has represented 

that the ABS Securities will be listed in 

$1000 denominations with its existing 

debt floor trading rules applying to the 

trading. In any event, financial 

information regarding the issuers of the 

Underlying Securities will be publicly 

available.26

Due to the pass-through and passive 

nature of the ABS Securities, the 

Commission does not object to the 

Exchange’s reliance on the assets and 

stockholder equity of the Underlying 

Securities rather than the Trust to meet 

the requirement in section 107A of the 

Company Guide. The Commission notes 

that the distribution and principal 

amount/aggregate market value 

requirements found in sections 107A(b) 

and (c), respectively, will otherwise be 

met by the Trust as issuer of the ABS 

Securities. Thus, the ABS Securities 

will conform to the initial listing 

guidelines under section 107A and 

continued listing guidelines under 

sections 1001–1003 of the Company 

Guide, except for the assets and 

stockholder equity characteristics of the 

Trust. At the time of issuance, the 

Commission also notes that the ABS 

Securities will receive an investment 

grade rating from an NRSRO. 

The Commission also believes that the 

listing and trading of the ABS Securities 

should not unduly impact the market 

for the Underlying Securities or raise 

manipulative concerns. As discussed 

more fully above, the Exchange 

represents that, in addition to requiring 

the issuers of the Underlying Securities 

meet the Exchange’s section 107A 

listing requirements (in the case of 

Treasury securities, the Exchange will 

rely on the fact that the issuer is the 

United States Government rather than 

the asset and stockholder tests found in 

section 107A), the Underlying Securities 

will be required to meet or exceed the 

Exchange’s Bond and Debenture Listing 

Standards pursuant to section 104 of the 

Amex’s Company Guide, which among 

other things, requires that underlying 

debt instrument receive at least an 

investment grade rating of ‘‘B’’ or 

equivalent from an NRSRO. 

Furthermore, at least 75% of the basket 

is required to contain Underlying 

Securities from issuances of $100 

million or more. The Amex also 

represents that the basket of Underlying 

Securities will not be managed and will 

remain static over the term of the ABS 

securities. In addition, the Amex’s 

surveillance procedures will serve to 

deter as well as detect any potential 

manipulation. 

The Commission notes that the 

investors may obtain price information 

on the Underlying Securities through 

market venders such Bloomberg, or 

though Web sites such as http://

www.investinginbonds.com (for 

Underlying Corporate Bonds) and

http://publicdebt.treas.gov and http://

www.govpx.com (for Treasury Securities 

and GSE Securities, respectively). 

The Commission finds good cause for 

approving the proposed rule change 

prior to the thirtieth day after the date 

of publication of notice thereof in the 

Federal Register. The Amex has 

requested accelerated approval because 

these products are virtually identical to 

Select Notes Trust currently listed and 

traded on the Amex.27 The Commission 

believes that the ABS Securities will 

provide investors with an additional 

investment choice and that accelerated 

approval of the proposal will allow 

investors to begin trading the ABS 

Securities promptly. Additionally, the 

ABS Securities will be listed pursuant 

to Amex’s existing hybrid security 

listing standards as described above. 

Based on the above, the Commission 

believes that there is good cause, 

consistent with sections 6(b)(5) and 

19(b)(2) of the Act 28 to approve the 

proposal on an accelerated basis.

V. Conclusion 

It is therefore ordered, pursuant to 

section 19(b)(2) of the Act,29 that the 

proposed rule change (SR–Amex–2003–

99) is hereby approved on an 

accelerated basis.

For the Commission, by the Division of 

Market Regulation, pursuant to delegated 

authority.30

Margaret H. McFarland, 

Deputy Secretary.

[FR Doc. 04–2826 Filed 2–9–04; 8:45 am] 

BILLING CODE 8010–01–P

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–49180; File No. SR–BSE–

2004–02] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by the 

Boston Stock Exchange, Inc. Relating 

to Complex Orders 

February 3, 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 

28, 2004 the Boston Stock Exchange, 

Inc. (‘‘BSE’’ 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. 

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 Exchange proposes to amend its 

rule regarding Complex Orders. The text 

of the proposed rule change is available 

at the Exchange and at the Commission.