21224 Federal Register / Vol. 65, No. 77 / Thursday, April 20, 2000 / Notices

13 15 U.S.C. 78f(b).

14 15 U.S.C. 78f(b)(4).

15 15 U.S.C. 78s(b)(3)(A)(ii).

16 17 CFT 240.19b–4(f)(2).

17 In reviewing this proposal, the Commission has

considered its impact on efficiency, competition,

and capital formation. 15 U.S.C. 78c(f).

18 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. 42307

(January 3, 2000), 65 FR 1206.

costs of trading other financial

instruments, and to increase the number

of options orders that are routed to the

Exchange. While the Exchange

anticipates that other options exchanges

may also reduce fees charged to

customers, it believes that the proposed

fee changes will increase options usage

among all investors and stimulate

industry-wide growth in the options

business.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b) of the Act 13 in general, and

furthers the objectives of Section

6(b)(4) 14 in particular, in that it

provides for the equitable allocation of

reasonable dues, fees and other charges

among its members and other persons

using its facilities.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The 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

The Exchange has neither solicited

nor received comments on the proposed

rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) of the Act,15 and Rule

19b–4(f)(2) thereunder,16 in that it

establishes or changes a due, fee, or

other charge imposed by the Exchange.

At any time within 60 days of the filing

of such proposed rule change, the

Commission may summarily abrogate

such rule change if it appears to the

Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors

or otherwise in furtherance of the

purposes of the Act.17

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, N.W., Washington, D.C. 20549–

0609. 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 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 the File No.

SR–Amex–00–15 and should be

submitted by May 11, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.18

Jonathan G. Katz,

Secretary.

[FR Doc. 00–9917 Filed 4–19–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42687; File No. SR–Amex–

99–25]

Self-Regulatory Organizations; Order

Granting Approval to Proposed

Amendments to the Amex Constitution

by the American Stock Exchange LLC

Eliminating the Requirement That the

Chairman Also Be the CEO

April 13, 2000.

I. Introduction

On July 16, 1999, the American Stock

Exchange, Inc. (‘‘Amex’’ or ‘‘Exchange’’)

submitted to the Securities and

Exchange Commission (‘‘Commission’’),

pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’)1 and Rule 19b–4 2 thereunder, a

proposed rule change. In its proposal,

Amex seeks to eliminate the

requirement that the Chairman also be

the Chief Executive Officer (‘‘CEO’’) of

the Exchange. The proposed rule change

was published for comments in the

Federal Register on January 7, 2000.3

The Commission received no comments

on the filing and this order approves the

proposal.

II. Description of the Proposal

Article II, Section 4(a) of the Amex

Constitution currently requires that the

Chairman of the Board also act as the

CEO of the Exchange. The Chairman

thus performs the standard functions of

a Board Chairman, as well as being

responsible to the Board for the

management and administration of the

affairs of the Exchange as CEO.

The Exchange proposes to amend

Article II, Section 4(a) of the

Constitution to eliminate the

requirement that the Chairman also act

as the CEO of the Exchange. Amex

represents that the NASD’s two other

subsidiaries (the Nasdaq Stock Market

and NASD Regulation), both have nonexecutive Chairmen. Amex believes that

having a non-executive Chairman attend

to the functions of a Chairman would

allow the CEO to focus on the

operations of the Exchange.

Nevertheless, the proposal gives Amex

the flexibility to choose to have two

people fill the Chairman and CEO

positions or to have the same person fill

these two positions.

As a result of the amendment to

Article II, Section 4(a) of the

Constitution, Amex made a number of

conforming changes to other provisions

of the Constitution and rules. Before this

proposal, Amex’s rules generally did not

make a distinction between whether the

Chairman/CEO was serving in his

capacity as the Chairman or the CEO

and used the term ‘‘Chairman’’ for both

of these functions. To allow for separate

persons to serve as Chairman and CEO,

Amex examined its rules and made a

determination as to whether a particular

function was normally handled by the

Chairman or CEO. Based on this

examination, Amex then changed the

term ‘‘Chairman’’ to CEO when it

determined that Chairman/CEO was

acting in his capacity as the CEO. Amex

had to make choices, however, when the

function was properly performed by

either the Chairman or the CEO. In

addition, Article II, Section 3

(Chairman) and Article II, Section 4(a)

(Chief Executive Officer), discussing the

selection and authority of the Chairman

and CEO respectively, have been

appropriately rearranged. Other than

splitting the Chairman and CEO roles

and making the above-mentioned

conforming changes, the Amex

represents that there are no substantive

changes being made.

III. Discussion

The Commission finds that the

proposed rule change is consistent with

Federal Register / Vol. 65, No. 77 / Thursday, April 20, 2000 / Notices 21225

4 In addition, purusant to Section 3(f) of the Act,

the Commission has considered the proposed rule’s

impact on efficiency, competition, and capital

formation. 15 U.S.C. 78c(f).

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

6See Securities Exchange Act Release No. 42455

(February 24, 2000), 65 FR 11401 (March 2, 2000)

(File No. 10–127).

7 15 U.S.C. 78s(b)(2).

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 Katherine A. England, Assistant

Director, Commission, from Robert E. Aber, Senior

Vice President and General Counsel, Nasdaq, dated

March 30, 2000 (‘‘Amendment No. 1’’). Amendment

No. 1 makes certain technical corrections to the

proposed rule change.

the requirements of the Act. 4 In

particular, the Commission finds the

proposal is consistent with Section

6(b)(5)5 of the Act. Section 6(b)(5)

requires, among other things, that the

rules of an exchange be designed to

promote just and equitable principles of

trade and to protect investors and the

public interest.

The Commission believes that the

proposal is consistent with the Act. In

particular, Amex represented that

splitting the Chairman/CEO functions

will allow the CEO to focus on the

operations of the Exchange. The

Commission agrees and believes that the

proposal should allow the CEO to

devote more time to the day-to-day

operations of the Exchange.

In approving this rule change,

however, the Commission notes that the

proposed language now permits the

Chairman to be affiliated with a member

of the Exchange if separate persons hold

the Chairman and CEO positions. As the

Commission stated in the order

approving the International Securities

Exchange LLS’s application for

registration as a national securities

exchange, the affiliation of the

Chairman with one of the Exchange’s

members implicates certain conflicts of

interest, or at least gives the appearance

of such conflicts.6 Amex represented

that it made this change to make its

corporate governance structure

consistent with other NASD entities,

such as NASD Regulation, which in

1999 had a Chairman who was affiliated

with an NASD member. Amex also

represented that the change, other than

splitting the Chairman and CEO

positions, will have no substantive

effect on the operation of the Exchange.

Nevertheless, if Amex chooses to split

the Chairman/CEO positions and has a

Chairman affiliated with a member,

Amex’s Chairman should avoid actual

or apparent conflicts of interest.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,7 that the

proposed rule change (SR–Amex–99–

25) is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Jonathan G. Katz,

Secretary.

[FR Doc. 00–9919 Filed 4–19–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42672; File No. SR–NASD–

00–10]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. Relating to Its

Transaction Credit Pilot Program

April 12, 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 March 6,

2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its whollyowned subsidiary, The Nasdaq Stock

Market, Inc. (‘‘Nasdaq’’), 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 Nasdaq. Nasdaq filed an

amendment to the proposed rule change

on March 31, 2000,3 which amendment

replaces and supersedes the original

proposal. 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

Nasdaq is filing a proposed rule

change amending NASD Rule 7010 to

extend Nasdaq’s transaction credit pilot

program for an additional six months for

Tape A reports and to discontinue the

pilot program for Tape B reports. Below

is the text of the proposed rule change.

Proposed new language is in italic;

proposed deletions are in brackets.

7010 System Services

(a)–(b) No Change.

(c)(1) No Change.

(2) Exchange-Listed Securities

Transaction Credit. For a pilot period,

qualified NASD members that trade

securities listed on the NYSE [and

Amex] in over-the-counter transactions

reported by the NASD to the

Consolidated Tape Association may

receive from the NASD transaction

credits based on the number of trades so

reported. To qualify for the credit with

respect to Tape A reports, an NASD

member must account for 500 or more

average daily Tape A reports of overthe-counter transactions as reported to

the Consolidated Tape during the

concurrent calendar quarter. [To qualify

for the credit with respect to Tape B

reports, an NASD member must account

for 500 or more average daily Tape B

reports of over-the-counter transactions

as reported to the Consolidated Tape

during the concurrent calendar quarter.]

If an NASD member is so qualified to

earn credits based [either] on its Tape A

activity, [or its Tape B activity, or both,]

that member may earn credits from [one

or both (as the case may be, depending

on the qualification standards) pools]

the Tape A pool maintained by the

NASD, [each] such pool representing

40% of the revenue paid by the

Consolidated Tape Association to the

NASD for [each of] Tape A [and Tape

B] transactions. A qualified NASD

member may earn credits from [such

pools] the Tape A pool according to the

member’s pro rata share of the NASD’s

over-the-counter trade reports in [each

of] Tape A [and Tape B] for each

calendar quarter starting with [July 1,

1999, and ending with the calendar

quarter starting on October 1, 1999]

January 1, 2000, and ending with the

calendar quarter starting on April 1,

2000.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

Nasdaq 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. Nasdaq has prepared

summaries, set forth in Sections A, B,

and C below, of the most significant

aspects of such statements.