39638 Federal Register / Vol. 65, No. 124 / Tuesday, June 27, 2000 / Notices

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

2 17 CFR 240.19b–4.

3See Letter from Claire P. McGrath, Vice

President and Special Counsel, Derivative

Securities, Amex to Nancy Sanow, Assistant

Director, Division of Market Regulation

(‘‘Division’’), Commission, dated June 9, 2000.

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

Exchange clarified the proposed rule text and

confirmed that a member’s failure to report an

options transaction within 90 seconds would be

considered a violation of proposed Amex Rule 992.

4The Exchange represents that this is currently

an informal policy of the Exchange, which Amex

is seeking to codify by adopting Amex Rule 992, as

proposed in this filing. Voice Mail Message from

Scott G. Van Hatten, Legal Counsel, Derivative

Securities, Amex, to Melinda R. Diller, Attorney,

Division, Commisison, on March 28, 2000.

5According to the Exchange, the AODB is an

electronic order book and execution-processing

system that was adopted to replace and improve

upon what was once a paper-based specialist’s

book.

6An example of such a trade is one that does not

include either the specialist or a customer limit

order as a party to the trade.

7 In Amendment No. 1, the Amex clarified that a

failure to report a single options transaction within

90 seconds would be considered a violation of the

proposed options rule. See Amendment No. 1,

supra note 3.

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

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

the evidence establishes that it is

consistent with the protection of

investors and the purposes fairly

intended by the policy and provisions of

the 1940 Act. For the reasons and upon

the facts set forth above, applicants state

that the requested order meets the

standards set forth in Section 26(b) and

should, therefore, be granted.

For the Commission, by the Division of

Investment Management, pursuant to

delegated authority.

Jonathan G. Katz,

Secretary.

[FR Doc. 00–16147 Filed 6–26–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42966; File No. SR–Amex–

00–03]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the American Stock Exchange LLC

Relating to the Reporting of Options

Transactions

June 20, 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 February

22, 2000, the American Stock Exchange

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

with the Securities and Exchange

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

the proposed rule change relating to the

reporting of options transactions. The

Amex filed Amendment 1 to this

proposal on June 12, 2000.3 The

proposed rule change, as amended, is

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 has filed with the

Commission a proposed rule change

adopting a new rule, Amex Rule 992, to

require the reporting of options

transactions within 90 seconds. The text

of the proposed rule change, as

amended, is set forth below. Additions

are in italics.

Trade Reporting Rules

Section 9. Miscellaneous Provisions

Applicable to Options

Rule 992.

(a) A member or member organization

initiating an options transaction,

whether acting as principal or agent,

must report or ensure the transaction is

reported within 90 seconds of the

execution to the Amex Options Market

Data System for dissemination to the

Options Price Reporting Authority.

(b) Transactions not reported within

90 seconds after execution shall be

designated as late. A pattern or practice

of late reporting without exception

circumstances may be considered

conduct inconsistent with just and

equitable principles of trade.

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

The Exchange proposes to adopt a

new rule, Amex Rule 992, to require

options transactions reporting within 90

seconds. The Amex represents that it is

Exchange policy that any member

initiating an options transaction on the

floor of the Exchange, whether acting as

principal or agent, must ensure that the

trade is properly reported or ‘‘printed on

the tape.’’ 4

The reporting of options transactions

is currently handled by the Amex

Options Display Book (‘‘AODB’’).5 The

AODB handles the execution processing

of orders routed to it both electronically

and manually. Orders routed

electronically are either executed

automatically by the Exchange’s AutoEx system or executed by the specialist

through the AODB. These options

transactions are immediately reported to

the Amex Option Market Data System,

which processes all Amex trades, and

the Options Price Reporting Authority,

which disseminates trade information to

the Amex’s members and the investing

public through vendors. Orders

manually routed to the Exchange

through a floor broker and executed in

the trading crowd are reported to the

specialist or his clerk for entry into the

AODB and processed in the same

manner as electronically routed and

executed trades.6

Although Amex estimates that 60–

70% of options transactions are

electronically routed and executed

orders that are immediately reported

and printed on the tape, the Exchange

believes that the adoption of a specific

options trade reporting rule is

appropriate, particularly for those

orders routed and executed manually.

Under the proposed rule, transactions

not reported within 90 seconds after

execution will be designated as late.

Patterns or practices of late reporting

without exceptional circumstances may

be considered conduct inconsistent with

just and equitable principles of trade.7

2. Statutory Purpose

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 it is

designed to prevent fraudulent and

manipulative acts and practices, to

promote just and equitable principles of

change, 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 and a national market

system.

Federal Register / Vol. 65, No. 124 / Tuesday, June 27, 2000 / Notices 39639

10 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Release No. 42374

(February 2, 2000), 65 FR 6427 (February 9, 2000).

4Originally, Rule G–36 applied to all primary

offerings subject to Rule 15c2–12, as well as to

Small Issue Securities for which an official

statement in final form was prepared, bud did not

apply to Limited Offering Securities, Short-Term

Securities and Puttable Securities.

5See Securities Exchange Act Release No. 32086

(March 31, 1993), 58 FR 18290 (April 8, 1993);

‘‘Delivery of Official Statements to the Board: Rule

G–36,’’ MSRB Reports, Vol. 12, No. 3 (September

1992) at 11. Thus, only primary offerings exempt

from Rule 15c2–12 for which no official statement

in final form is prepared and Limited Offering

Securities remain exempt from Rule G–36.

Currently, Small Issue Securities, Short-Term

Securities, and Puttable Securities, are subject to

Rule G–36(c)(1) where an official statement in final

form has been prepared by or on behalf of the

issuer.

6 In contrast, Rule G–36(c)(i) currently requires

that the underwriter send the official statement to

the Board by the business day after the bond

closing, regardless of whether the underwriter has

in fact received the official statement by such day.

7 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).

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

9 15 U.S.C. 78o–4(b)(2)(C).

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

The Exchange neither solicited nor

received written comments 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 adequate 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 Amex consents, the

Commission will:

A. By order approve the 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. 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 the submissions, 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 persons, 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 at

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–00–03 and should be

submitted by July 18, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–16206 Filed 6–26–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42967; File No. SR–MSRB–

99–11]

Self-Regulatory Organizations;

Municipal Securities Rulemaking

Board; Order Approving Proposed

Rule Change To Amend Rule G–36

June 21, 2000.

I. Introduction

On December 10, 1999, the Municipal

Securities Rulemaking Board (‘‘MSRB’’

or the ‘‘Board’’) filed with 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

amend Rule G–36, on delivery of official

statements, advance refunding

documents and Forms G–36(OS) and G–

36(ARD) to the Board or its designee.

The proposed rule change was

published for comment in the Federal

Register on February 9, 2000.3 The

Commission received no comments on

the proposal. This order approves the

proposal.

II. Description of the Proposal

The Board has filed with the

Commission a proposed rule change to

amend Rule G–36, on delivery of official

statements, advance refunding

documents and Forms G–36(OS) and G–

36(ARD) to the Board or its designee.

Rule G–36 requires, among other things,

that a broker, dealer or municipal

securities dealer (a ‘‘dealer’’) acting as

underwriter in a primary offering of

municipal securities (with certain

limited exceptions) send to the Board

copies of the official statement and

completed Form G–36(OS).

Originally, Rule G–36 applied to all

primary offerings of municipal

securities regardless of principal

amount, other than primary offerings

that qualified for exemption under

paragraph (d)(1) of Rule 15c2–12 under

the Act.4 The Board subsequently

amended Rule G–36 to include certain

categories of primary offerings that are

exempt under Rule 15c2–12(d)(1).5 For

any primary offering subject to Rule G–

36(c)(i), the underwriter currently is

required to send two copies of the

official statement, if one is prepared, in

final form with two copies of Form G–

36(OS), to the Board by the business day

after the issuer delivers the municipal

securities to the underwriter (the ‘‘bond

closing’’).

As amended, the rule would require

an underwriter in a primary offering

subject to Rule G–36(c)(i) for which an

official statement in final form is

prepared by the issuer to send two

copies of the official statement in final

form, together with two copies of Form

G–36(OS), to the Board by the later of

(i) one business day after the bond

closing or (ii) one business day after

receipt of the official statement from the

issuer.6

III. Discussion

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act 7 and the

rules and regulations thereunder

applicable to the MSRB.8 In particular,

the Commission finds the amendments

to MSRB Rule G–36 consistent with the

requirements of Section 15B(b)(2)(C) 9 of

the Act, which provides, in part, that

the Board’s rules shall:

be 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 regulating, clearing,

settling, processing information with respect