Federal Register / Vol. 66, No. 83 / Monday, April 30, 2001 / Notices 21421

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 Elizabeth King, Associate Director, Division of

Market Regulation, Commission, dated April 16,

2001 (‘‘Amendment No. 1’’). Amendment No. 1

revises proposed Commentary .08 to Amex Rule

915 to require the Amex to maintain a record of any

bona fide business considerations it relies upon in

denying or placing limitations or conditions upon

a proposed listing.

Electrification Administration. The

Commission receives about 89 Form U–

6B–2s per year from 89 respondents

who each file once, which imposes an

annual burden of about 89 hours.

The estimates of the average burden

hours are made solely for the purposes

of the Paperwork Reduction Act and are

not derived from a comprehensive or

even representative survey or study of

the costs of Commission rules and

forms.

An agency may not conduct or

sponsor, and a person is not required to

respond to, a collection of information

unless it displays a currently valid

control number.

Written comments regarding the

above information should be directed to

the following persons: (i) Desk Officer

for the Securities and Exchange

Commission, Office of Information and

Regulatory Affairs, Office of

Management and Budget, Room 10102,

New Executive Office Building,

Washington, DC 20503; and (ii) Michael

E. Bartell, Associate Executive Director,

Office of Information Technology,

Securities and Exchange Commission,

450 Fifth Street, NW., Washington, DC

20549. Comments must be submitted to

OMB within 30 days of this notice.

Dated: April 23, 2001.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–10643 Filed 4–27–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44211; File No. SR–AMEX–

2001–14]

Self-Regulatory Organizations; Notice

of Filing of a Proposed Rule Change by

the American Stock Exchange LLC

Relating to Members’ Written

Proposals to List Equity Option

Classes

April 23, 2001.

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 8,

2001, the American Stock Exchange LLC

(‘‘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 Exchange. The

Exchange submitted an amendment to

the proposed rule change on April 17,

2001.3 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

The Amex proposes to adopt

Commentary .08 to Amex Rule 915 to

provide procedures for members to

submit written proposals requesting the

listing for trading on the Amex of any

equity option class. The text of the

proposed rule change is set forth below.

All language is being added.

* * * * *

Rule 915 Criteria for Underlying

Securities

* * * * *

Commentary

* * * * *

.08 Members or member

organizations may submit written

proposals requesting the Exchange to

review listing and trading any equity

option class. The written proposal

should include a discussion of how the

proposed option and its underlying

security comply with the criteria set

forth in paragraph (a) below and with

the considerations set forth in

paragraph (b). Written proposals

received prior to 1:00 p.m. will be

considered to be received on that

business day and proposals received

after 1:00 p.m. will be deemed to have

been received on the next business day.

(a) Listing Criteria—To be eligible to

be considered for listing on the

Exchange, the underlying security must

meet the criteria and guidelines set forth

in Rule 915 and its Commentary for

options on equity securities.

(b) Listing Considerations—In

determining whether to list and trade an

option class proposed pursuant to

Commentary, the Exchange may

consider any or all of the following

factors:

(i) If the proposed option is already

traded on another exchange, the

consolidated trading volume and trends

in such volume over near and long-term;

(ii) The level and nature of the share

and/or trade volume for the underlying

security and trends in such volume over

near and long-term;

(iii) If the underlying security is listed

(or is a prospective listed security) on

the Amex, or an affiliated of the Amex,

the views of the issuer of such security;

(iv) The price, price volatility, and

spread of the underlying security, its

‘‘short interest’’ (i.e., the total amount of

the underlying equity security that has

been sold short and has not yet been

repurchased to close out short positions

in the security) and the ability of

members and investors to borrow the

underlying security;

(v) The industry the underlying

security represents in order to: (i)

maintain diversity among various

industries and issuers selected for

options trading; or (ii) provide investors

with the ability to use standardized

options in industry sectors with growing

and developing investor interest; and

(vi) The impact the listing could have

on bona fide strategies or businesses of

the Exchange or any of its affiliates.

The Exchange shall review and make

a determination regarding a member’s

listing proposal within twenty-five days

of receipt of the proposal. If the

determination is not to list the proposed

option class or to limit or condition the

listing of the option in any way, then the

Exchange shall, in writing within the

twenty-five day period, inform the

member submitting the proposal the

basis for denial of the proposal or the

basis for any limitation or condition put

on its acceptance. If the Exchange relies

upon the impact the listing could have

on bona fide strategies or businesses of

the Exchange or its affiliates as a factor

for denying, limiting or conditioning the

proposed listing, the Exchange shall

maintain a record of the bona fide

business or strategic considerations

supporting its decision.

These procedures will not alter or

have any impact on the Exchange’s

rules, procedures or decisions for

allocating and/or reallocating to a

specialist unit those options the

Exchange determines to list and trade.

In addition, the Exchange’s

interpretation regarding threats,

harassment and retaliation set forth in

Rule 16, Commentary .01 shall apply to

the listing proposals made by members

pursuant to this Commentary .08.

* * * * *

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 statutory basis for,

the proposed rule change and discussed

any comments it received on the

proposed rule change. The text of these

21422 Federal Register / Vol. 66, No. 83 / Monday, April 30, 2001 / Notices

4As part of a settlement of an enforcement action

by the Commission, four of the five options

exchanges, including the Amex, are required to

adopt rules to codify listing procedures to be

carried out when a member or member organization

requests the exchange to list options not currently

trading on the exchange. See Order Instituting

Public Administrative Proceeding Pursuant to

Section 19(h)(1) of the Securities Exchange Act of

1934, Making Findings and Imposing Remedial

Sanctions, Securities Exchange Act Release No.

43268 (September 11, 2000).

5See Amendment No. 1, supra note 3.

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

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

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

Commentary .08 to Amex Rule 915 to

provide procedures for members to

submit written proposals requesting the

listing for trading on the Exchange of

any equity option class.4 Commentary

.08 would require the underlying

security to meet the criteria and

guidelines set forth in Amex Rule 915

and its Commentary before it can be

considered for listing on the Exchange.

The written proposal would be required

to include a discussion of how the

proposed listing complies with the

criteria set forth in Amex Rule 915 and

its Commentary and the factors set forth

below. If a proposal is submitted after

1:00 p.m. on a business day, it would be

considered submitted on the following

business day. If the underlying security

meets the eligibility criteria and

guidelines, the Exchange would

consider the following factors in

determining to list the proposed option:

• If the proposed option is already

traded on another exchange, the

consolidated trading volume and trends

in such volume over the near and longterm;

• The level and nature of the share

and/or trade volume for the underlying

security and trends in such volume over

the near and long-term;

• If the underlying security is listed

(or is a prospective listed security) on

the Exchange, or on an affiliate of the

Exchange, the views of the issuer of

such security;

• The price, price volatility, and

spread of the underlying security, its

‘‘short interest’’ (i.e., the total amount of

the underlying equity security that has

been sold short and has not yet been

repurchased to close out short positions

in the security) and the ability of

members and investors to borrow the

underlying security.

• The industry the underlying

security represents in order to: (i)

Maintain diversity among various

industries and issuers selected for

options trading; or (ii) provide investors

with the ability to use standardized

options in industry sectors with growing

and developing investor interest; and

• The impact the listing could have

on bona fide strategies or businesses of

the Exchange or any of its affiliates. The

Amex would be required to maintain a

record of any bona fide business

considerations it relies upon in denying

or placing limitations or conditions

upon a proposed listing.5

The Exchange would be required to

review and make a determination

regarding a member’s listing proposal

within 25 days of receipt of the

proposal. If the Exchange decides not to

list the proposed option class or to limit

or condition the listing of the option in

any way, the Exchange would be

required, in writing and within the 25

day period, to inform the member of the

basis for denial of the proposal or the

basis for any limitation or condition put

on its acceptance.

The proposed rule change would not

limit the Exchange’s right on its own

determination to research, identify, and

propose to the Stock Selection

Committee, as it does today, the listing

of options on securities that meet the

listing criteria set forth in Amex Rule

915 and its Commentary. The proposed

procedures would not alter or have any

impact on the Exchange’s rules,

procedures or decisions for allocating

and/or reallocating to a specialist unit

those options the Exchange determines

to list. In addition, proposed

Commentary .08 would reference the

anti-harassment rule set forth in Amex

Rule 16, Commentary .01, to prohibit

threats, harassment, and retaliation

against any person or entity making or

advocating a listing proposal or

beginning to make markets in any

option class on any exchange or other

market.

2. Statutory Basis

The Exchange believes that the

proposed rule change, as amended, is

consistent with section 6(b) of the Act 6

in general and furthers the objectives of

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

designed to promote just and equitable

principles of trade, remove

impediments to a free and open market

and a national market system, and

protect investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Amex does not believe that the

proposed rule change, as amended, will

impose any burden on competition that

is 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 Amex did not solicit or receive

written comments on 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 Amex 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. 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 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 filings 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–2001–14 and should be

submitted by May 21, 2001.

Federal Register / Vol. 66, No. 83 / Monday, April 30, 2001 / Notices 21423

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. 43983

(February 20, 2001), 66 FR 12576 (February 27,

2001).

4 In approving this proposed rule change, the

Commission notes that it 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.

6 15 U.S.C. 78f(b)(5).

7See, e.g., American Stock Exchange Rule 950(d),

Commentary .04., Chicago Board Options Exchange

Rule 6.9(e).

8 15 U.S.C. 78s(b)(2).

9 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3See letter from Laura Gansler, Counsel, NASD

Dispute Resolution, to Florence Harmon, Senior

Special Counsel, Division of Market Regulation,

Commission, dated April 19, 2001 (‘‘Amendment

No. 1’’). In Amendment No. 1, the NASD changed

the first sentence of NASD Rule 10306 to indicate

that the terms of a settlement agreement do not

need to be disclosed to NASD Dispute Resolution,

rather than the NASD as originally proposed.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–10609 Filed 4–27–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44208; File No. SR–ISE–

01–02]

Self-Regulatory Organizations;

International Securities Exchange LLC;

Order Granting Approval to Proposed

Rule Change Relating to Anticipatory

Hedging Activity

April 20, 2001.

On January 12, 2001, the International

Securities Exchange LLC (‘‘ISE’’ or

‘‘Exchange’’) field with 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

thereunder,2 a proposed rule change

relating to anticipatory hedging activity.

The proposed rule change would

prohibit a member or a person

associated with a member who has

knowledge of all the terms and

conditions concerning the imminent

execution of (1) an order and a solicited

order, (2) an order being facilitated, or

(3) two orders being crossed, to enter,

based on that knowledge, an order to

buy or sell an option of the same class,

shares in the underlying security, or any

related instrument, before the same

information is disclosed to the trading

crowd.

The proposed rule change was

published for comment in the Federal

Register on February 27, 2001.3 The

Commission received no comments on

the proposal.

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 4 and, in particular, the

requirements of section 6 of the Act 5

and the rules and regulations

thereunder. The Commission finds

specifically that the proposed rule

change is consistent with section 6(b)(5)

of the Act,6 because it is designed to

maintain the integrity of the ISE’s

market by preventing the misuse of nonpublic information and affording the

trading crowd a fair and full

opportunity to make informed trading

decisions. It also conforms to similar

rules at other options exchanges relating

to anticipatory hedging.7

It is therefore ordered, pursuant to

section 19(b)(2) of the Act,8 that the

proposed rule change (File No. SR–ISE–

01–02) be, and it hereby is, approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–10608 Filed 4–27–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44214; File No. SR–NASD–

2001–21)

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

National Association of Securities

Dealers, Inc., Relating to Amendments

to the Fee Structure of the Code of

Arbitration Procedure

April 24, 2001.

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 23,

2001, the National Association of

Securities Dealers, Inc. (‘‘NASD’’),

through its wholly owned subsidiary,

NASD Dispute Resolution, Inc. (‘‘NASD

Dispute Resolution’’) 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 NASD Dispute Resolution.

On April 20, 2001, the NASD filed

Amendment No. 1 to the proposal.3 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

NASD Dispute Resolution is

proposing to amend the Code of

Arbitration of Procedure (‘‘Code’’) to

clarify or simplify several fee-related

provisions of the Code. Proposed new

language is in italics; proposed

deletions are in brackets.

* * * * *

10306. Settlements

[All settlements upon any matter shall

be at the election of the parties.]

(a) Parties to an arbitration may agree

to settle their dispute at any time.

(b) The terms of a settlement

agreement do not need to be disclosed

to NASD Dispute Resolution. However,

the parties will remain responsible for

payment of fees incurred, including fees

for previously scheduled hearing

sessions. If the parties fail to agree on

the allocation of outstanding fees, the

fees shall be divided equally among all

parties.

* * * * *

10319. Adjournments

(a) The arbitrator(s) may, in their

discretion, adjourn any hearing(s) either

upon their own initiative or upon the

request of any party to the arbitration.

(b) [Unless waived by the Director of

Arbitration upon a showing of financial

need,] If an adjournment requested by a

party is granted after arbitrators have

been appointed, the [a] party requesting

the adjournment [after arbitrators have

been appointed shall deposit with the

request for an adjournment,] shall pay a

fee equal to the initial deposit of hearing

session fees for the first adjournment

and twice the initial deposit of hearing

session fees, not to exceed [$1,000]

1,500 for a second or subsequent

adjournment requested by that party. [If

the adjournment is granted, the

arbitrator(s) may direct the return of the

adjournment fee.] The arbitrators may

waive these fees in their discretion. If

more than one party requests the

adjournment, the arbitrators shall

allocate the fees among the requesting

parties.

(c) Upon receiving a third request

consented to by all parties for an

adjournment, the arbitrator(s) may

dismiss the arbitration without

prejudice to the Claimant filing a new

arbitration.

* * * * *