[Federal Register Volume 61, Number 126 (Friday, June 28, 1996)]
[Notices]
[Pages 33786-33787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-16574]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37356; File No. SR-Amex-96-21]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the American Stock Exchange, Inc. Relating to Dissemination 
of Indications in Connection With Circuit Breaker Trading Halts Under 
Rule 117

June 24, 1996.
    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 June 17, 1996, the American Stock Exchange, Inc. (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') 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 Amex proposes to implement guidelines for dissemination of 
indications to the consolidated tape in connection with the resumption 
of trading following a ``circuit breaker'' trading halt pursuant to the 
Amex's Rule 117.\3\
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    \3\ The Commission notes that Rule 117--the Exchange's ``circuit 
breaker'' rule--provides that trading in securities on the Exchange 
shall halt (a ``Rule 117 halt'') and not reopen for one hour if the 
Dow Jones Industrial Average (``DJIA'') falls 250 points or more 
below its closing value on the previous trading day. The rule 
provides further that trading on the Exchange shall halt for two 
hours if the DJIA falls 400 points or more on that same day. Rule 
117 was approved by the Commission on a pilot basis on October 19, 
1988 and has been extended annually since then. See Securities 
Exchange Act Release No. 36414 (Oct. 25, 1995), 60 FR 55630 (Nov. 1, 
1995) (Commission's most recent order extending temporary approval 
of Rule 117).
    The Amex has filed a proposal to amend Rule 117 to reduce from 
one hour to thirty minutes the time period during which trading is 
halted due to a decline in the DJIA of 250 points below its closing 
value on the previous trading day, and to reduce from two hours to 
one hour the time period for a halt due to a 400 points decline in 
the DJIA. See Securities Exchange Act Release No. 37146 (April 26, 
1996), 61 FR 19650 May 2, 1996). The Commission has not yet 
completed its review of this proposed amendment.

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[[Page 33787]]

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
    The Exchange proposes to implement guidelines for the mandatory 
dissemination of indications to the consolidated tape in connection 
with the resumption of trading following a circuit breaker halt 
pursuant to its Rule 117. The purposes of the proposed criteria is to 
provide guidance to the Exchange's specialists as to the specific 
circumstances under which they are required to disseminate indications 
if a significant decline in the price of a stock from the previous last 
sale on the Exchange is anticipated when trading resumes following a 
circuit breaker halt.
    The Exchange proposes to implement the following guidelines:
    <bullet> Dissemination of an indication shall be mandatory prior to 
the reopening of trading if such reopening will result in a price 
change constituting the lesser of 10% or three points from the last 
sale reported on the Amex, or five points if the previous reported last 
sale is $100 or higher. No indications would be required if the price 
change is less than one point.
    <bullet> If, on any day that a Rule 117 halt is in effect, trading 
in a security has not reopened by one-half hour after the resumption of 
trading on the Exchange, the matter should be treated as a delayed 
opening, and would require an indication as well as a Floor Official's 
supervision.
    The Exchange has existing procedures which require dissemination of 
indications prior to delayed openings and reopenings following 
regulatory or non-regulatory halts in individual securities. The 
Exchange will continue to require dissemination of indications in those 
situations.\4\
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    \4\ The Exchange notes that the proposed criteria are identical 
to those currently in place at the New York Stock Exchange 
(``NYSE'') in connection with circuit breaker halts under NYSE Rule 
80B. See Securities Exchange Act Release No. 26419 (January 5, 
1989), 54 FR 1041 (January 11, 1989).
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2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(5) that an exchange have rules that are 
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 to, and facilitating 
transactions in securities, to remove impediments to protect and 
perfect the mechanism of a free and open market and a national market 
system, and in general, to protect investors and the public interest.

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 Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. 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-96-21 and should be 
submitted by July 19, 1996.
    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. 96-16574 Filed 6-27-96; 8:45 am]
BILLING CODE 8010-01-M