[Federal Register Volume 62, Number 230 (Monday, December 1, 1997)]
[Notices]
[Pages 63576-63577]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31391]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39347; File No. SR-Amex-97-41]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange, Inc. Relating to Trading 
Differentials for Options Contracts

November 21, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice 
is hereby given that on November 3, 1997, the American Stock Exchange, 
Inc. (``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 self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend Rules 952 and 951C to adopt a 
procedure that would allow the Exchange to establish the minimum 
fractional change (or trading increments) for options. 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 self-regulatory organization 
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 self-regulatory organization 
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
    Currently, Exchange Rule 952 provides that the minimum fractional 
change for stock options trading at $3.00 or higher shall be one-eighth 
and for stock options trading under $3.00 shall be one-sixteenth. 
Additionally, Rule 951C provides that the minimum fractional change for 
stock index options shall be one-eighth for stock index options trading 
at a premium greater than $300.00 and stock index options less than 
$300.00 shall be one sixteenth. The Exchange now proposes to amend 
Rules 952 and 951C to give the Board of Governors the authority to 
establish the minimum fractional changes for options. Until such time 
as the Board determines to use its authority to change the minimum 
fractional changes the current rules described above will apply. The 
proposal will allow the Exchange to revise its minimum fractional 
changes quickly in response to changes adopted in the underlying stock 
markets and at the other options exchanges. When the Board of Governors 
has determined to change the minimum trading increments, the Exchange 
will designate such a change as a stated policy, practice, or 
interpretation with respect to the administration of Rules 952 and 951C 
within the meaning of subparagraph (3)(A) of subsection 19(b) of the 
Exchange Act and will file a rule change for effectiveness upon filing 
with the Commission.
    As derivatives securities, the prices of options are determined in 
reference to the prices of the underlying securities. Consequently, the 
Exchange believes that where practicable, the Exchange should have 
minimum increments comparable to those applicable to the securities 
underlying its options.\3\
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    \3\ See Exchange Act Rel. No. 38571 (May 5, 1997), 62 FR 25682 
(May 9, 1997) (Commission order approving a change in the minimum 
increment to \1/16\ for securities listed on the American Stock 
Exchange); Exchange Act Rel. No. 38678 (May 27, 1997), 62 FR 30363 
(June 3, 1997) (Commission order approving a change in the minimum 
increment to \1/16\ for Nasdaq-listed securities); and Exchange Act 
Rel. No. 38897 (Aug. 1, 1997), 62 FR 42847 (Aug. 8, 1997) 
(Commission order approving a change in the minimum increment to \1/
16\th for NYSE listed-securities).

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[[Page 63577]]

2. Statutory Basis
    The Exchange represents that the proposed rule change is consistent 
with Section 6(b)(5) of the Act \4\ in that it is designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, and is not designed to permit unfair 
discrimination between customers, issuers, brokers or dealers.
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    \4\ 15 U.S.C. 78f(b).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any inappropriate 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 either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the 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 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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
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. Sec. 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 
Exchange. All submissions should refer to File No. SR-Amex-97-41 and 
should be submitted by December 22, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-31391 Filed 11-28-97; 8:45 am]
BILLING CODE 8010-01-M