Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Notices 38615

8 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 42128

(November 10, 1999), 64 FR 63836 (November 22,

1999).

4See Securities Exchange Act Release No. 42094

(November 3, 1999), 64 FR 61675 (November 12,

1999). While the maximum permissible number of

contracts in an option order executable through

AUTO–EX is generally fifty contracts, there are

three exceptions: the Institutional, Japan and S&P

MidCap 400 Indexes allow ninety-nine contract

orders.

5Order size maximum levels for Institutional,

Japan, and S&P MidCap 400 Indexes (Id.) would

remain at ninety-nine contracts under this proposal.

6 15 U.S.C. 78f(b).

7 15 U.S.C. 78f(b)(5).

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–15613 Filed 6–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42931; File No. SR–AMEX–

99–45]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange LLC To

Increase the Maximum Order Size

Eligible for Automatic Execution

June 13, 2000.

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

25, 1999, the American Stock Exchange

LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with

the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’)

the proposed rule change as described

in Items I, II, and III below, which Items

have been prepared by the Amex. 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 increase to

seventy-five, the maximum permissible

number of equity and index option

contracts in an order executable through

the AUTO–EX system. The text of the

proposed rule change is available at the

Office of the Secretary, Amex and at the

Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

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

Statutory Basis for, the Proposed Rule

Change

1. Purpose

In 1985, the Exchange implemented

the AUTO–EX system, which

automatically executes public customer

market and marketable limit orders in

options at the best bid or offer displayed

at the time the order is entered into the

Amex Order File (‘‘AOF’’). There are,

however, limitations on the number of

option contracts that can be entered into

or executed by these systems. AOF,

which handles limit orders routed to the

specialist’s book as well as orders

routed to AUTO–EX, was recently

increased to allow for the entry of orders

up to 250 option contracts.3 Generally,

however, AUTO–EX is only permitted

to execute equity option orders and

index option orders of up to fifty

contracts.4 Thus, market and marketable

limit orders of more than fifty contracts

are generally routed by AOF to the

specialist’s book.

The Exchange now proposes to

increase to seventy-five, the maximum

permissible number of equity and index

option contracts in an order that can be

executed through the AUTO–EX

system.5 It is proposed that this increase

in permissible order size be

implemented on a case-be-case basis for

an individual option class or for all

option classes when two floor governors

or senior floor officials deem such an

increase appropriate. The Exchange

represents that it has sufficient systems

capacity necessary to accommodate

implementation of the proposed

increase.

The Exchange represents that AUTO–

EX has been extremely successful in

enhancing execution and operational

efficiencies during emergency situations

and during other, non-emergency

situations for certain option classes. The

Exchange believes that automatic

executions of orders for up to seventyfive contracts will allow for the quick,

efficient execution of public customer

orders.

2. Statutory Basis

The proposed rule change is

consistent with Section 6(b)6 of the Act

in general and furthers the objectives of

Section 6(b)(5)7 in particular in that it is

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

trade, to foster cooperation and

coordination with persons engaged in

facilitating transactions in securities,

and to remove impediments to and

perfect the mechanism of a free and

open market.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Amex 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

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. Solicitations of Comments

The Commission invites interested

persons to submit written data, views,

and arguments concerning the

foregoing, including whether the

proposed rule change is consistent with

the Act. In addition, the Commission

seeks comment concerning whether the

proposed rule change fosters quote

competition among options market

professionals and enhances investors’

interests in obtaining the best available

price.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW,

Washington, DC 20549–0609. Copies of

38616 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Notices

8 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See Letter to Michael Walinskas, Deputy

Associate Director, Division of Market Regulation

(‘‘Division’’), Commission, from Michael J. Ryan,

Chief of Staff, Amex, dated September 24, 1999

(‘‘Amendment No. 1’’). In Amendment No. 1, Amex

proposes to amend Exchange Rule 18 instead of

rescinding the rule in its entirety, as proposed in

its initial filing, to provide that an issuer may

voluntarily withdraw a security from listing on the

Exchange upon written notice to the Exchange.

4See Letter to Marla Chidsey, Attorney, Division,

Commission, from Ivonne Lugo, Associate General

Counsel, Amex, dated February 2, 2000

(‘‘Amendment No. 2’’). In Amendment No. 2, Amex

proposes to require the issuer to comply with all

applicable state laws in effect in the state in which

it is incorporated prior to filing to delist from the

Amex. Amendment No. 2 also proposes to make

conforming amendments to the Amex Company

Guide Sections 1010 and 1011.

5Securities Exchange Act Release No. 42427

(February 15, 2000), 65 FR 9024.

6See 15 U.S.C. 781(d) and 17 CFR 240.12d2–2

describing how an issuer may delist from a national

securities exchange.

7The rule further states that the requirement of

written notice that must be met before an

application for delisting can be filed with the

Commission.

8 15 U.S.C. 78f.

9 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f).

10 15 U.S.C. 78f(b)(5).

11See Market 2000 Report: An Examination of

Current Equity Market Developments, Division,

Commission, January, 1994, at 30.

12 Id. at 31.

13Securities Exchange Act Release No. 41634, 64

FR 40633 (July 27, 1999).

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 File No.

SR–AMEX–99–45 and should be

submitted by July 12, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Jonathan G. Katz,

Deputy Secretary.

[FR Doc. 00–15617 Filed 6–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42928; File No. SR–Amex–

99–30]

Self-Regulatory Organizations;

American Stock Exchange LLC; Order

Approving Proposed Rule Change and

Amendments Nos. 1 and 2 Thereto

Amending Exchange Rule 18;

Withdrawal From Listing

June 13, 2000.

I. Introduction

On August 13, 1999, the American

Stock Exchange LLC (‘‘Amex’’ or

‘‘Exchange’’) submitted to the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) pursuant to section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’),1 and Rule 19b–4

thereunder,2 a proposed rule change to

rescind Exchange Rule 18. On

September 28, 1999, the Amex

submitted Amendment No. 1 to the

proposed rule change.3 On February 3,

2000, the Amex submitted Amendment

No. 2 to the proposed rule change.4 The

proposed rule change, as amended by

Amendments Nos. 1 and 2, was

published for comment in the Federal

Register on February 23, 2000.5 The

Commission did not receive any

comment letters with respect to the

proposal. This order approves the

Exchange’s proposal, as amended.

II. Description of the Proposal

Amex Rule 18 currently requires an

issuer, prior to withdrawing a security

from listing on the Exchange, to file

with the Exchange a certified copy of a

resolution adopted by the board of

directors authorizing withdrawal from

listing and registration and explaining

the reasons for such withdrawal. The

Amex rule also provides that the

Exchange may require the issuer to send

to all registered holders of such security

a statement of the reasons for such

application, together with facts in

support thereof within at least fifteen

days prior to the filing of a delisting

application with the Commission.6

These Exchange Rule 18 requirements

must be met before an application for

delisting can be filed with the

Commission.

According to the Amex, Exchange

Rule 18 has not been applied in many

years with respect to issuers seeking to

voluntarily withdraw their securities

from the listing on the Exchange. The

Exchange believes Amex Rule 18

represents a needless restriction

imposing burdensome delays on an

issuer’s decision to delist. The Amex

stated that the proposed amendment to

Exchange Rule 18 will implement its

decision to eliminate obstacles and

delays for issuers seeking to voluntarily

withdraw their common stock from

listing on the Exchange. Under the

proposed amendments to Amex Rule 18,

an issuer will be able to voluntarily

withdraw a security from listing on the

Exchange upon written notice to the

Exchange, provided the issuer complies

with all applicable state laws in effect

in the state in which it is incorporated.7

III. Discussion

The Commission finds that the

proposed rule change, as amended, is

consistent with the requirements of

Section 6 of the Act 8 and the rules and

regulations thereunder applicable to a

national securities exchange.9 In

particular, the Commission finds the

proposed rule change is consistent with

Section 6(b)(5) of the Act 10 and which

requires, among other things, that the

rules of an exchange be designed to

prevent fraudulent and manipulative

acts and practices, to promote

impediments to and perfect the

mechanism of a free and open market,

and to protect investors and the public

interest.

Over the last several years,

Commission staff has express concerns

regarding the potentially anticompetitive effects of certain rules

adopted by self-regulatory organizations

(‘‘SROs’’), such as Amex Rule 18.11 The

Commission encouraged the Amex to

revise the standards a company must

comply with prior to voluntarily

delisting its securities from the Amex.12

The Commission believes that the

exchanges should provide a listed

company with a reasonable opportunity

to move to another market if it so

desires, thereby increasing competition

among the markets. For example, on

July 21, 1999, the Commission approved

a proposed rule change to revise New

York Stock Exchange’s (‘‘NYSE’’) Rule

500 to simplify the procedures a NYSElisted company must follow to

voluntarily delist its securities from the

NYSE.13 The Commission believes that

the proposed amendments to Amex

Rule 18 should similarly eliminate

obstacles and delays for issuers seeking

to delist their securities voluntarily from

the Amex.

Furthermore, the voluntary delisting

procedures proposed by the Amex in

the amended proposal represent a

significant and positive change over the

current delisting process and

requirements in the Amex’s rules.

Specifically, the Commission believes

that the proposed requirement that a

listed company simply submit written