13816 Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Notices

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

2 17 CFR 240.19b–4.

3 17 CFR 240.19b(f)(6).

4See letter from Claire McGrath, Vice President

and Special Counsel, Amex to Nancy Sanow,

Assistant Director, Division of Market Regulation

(‘‘Division’’), Commission, dated February 26, 2001

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

Exchange deleted Commentary .01(g) from the

proposed rule text, and clarified the circumstances

under which customer orders would be routed to

the specialist instead of being automatically

executed.

any, matters have been added, deleted

or postponed, please contact:

The Office of the Secretary at (202)

942–7070.

Dated: March 2, 2001.

Jonathan G. Katz,

Secretary.

[FR Doc. 01–5675 Filed 3–5–01; 12:26 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[File No. 500–1]

In the Matter of Ives Health Co. Inc.;

Order of Suspension of Trading

March 5, 2001.

It appears to the Securities and

Exchange Commission that there is a

lack of current and accurate information

concerning the securities of Ives Health

Company, Inc., an Oklahoma

corporation, with its principal place of

business in Claremore, Oklahoma.

Questions have been raised about the

adequacy and accuracy of publicly

disseminated information concerning,

among other things, a product being

marketed by Ives Health for treatment of

human immunodeficiency virus (HIV).

The Commission is of the opinion that

the public interest and the protection of

investors require a suspension of trading

in the securities of Ives Health.

Therefore, it is ordered, pursuant to

section 12(k) of the Securities Exchange

Act of 1934, that trading in the

securities of Ives Health Company, Inc.

is suspended for the period from 9:30

a.m. EST, March 5, 2001, through 11:59

p.m. EST, March 16, 2001.

By the Commission.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–5676 Filed 3–5–01; 1:12 pm]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44013; File No. SR–AMEX–

01–05]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

American Stock Exchange LLC

Relating to Price Matching and

Improvement Enhancements to AutoEx

February 28, 2001.

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

Securities Exchange Act of 1934,1 and

Rule 19b–4 thereunder,2 notice is

hereby given that on February 12, 2001,

the American Stock Exchange LLC (the

‘‘Amex’’ or the ‘‘Exchange’’) 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 the Exchange.

The Exchange has designed the

proposed rule change as constituting a

‘‘non-controversial’’ rule change under

paragraph (f)(6) of Rule 19b–4 under the

Act,3 which renders the proposal

effective upon receipt of this filing by

the Commission. On February 27, 2001,

the Exchange Commission received

Amendment No. 1 to the filing.4

The Commission is publishing this

notice to solicit comments on the

proposed rule change from interested

persons.

1. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Amex proposes to implement

price improvement enhancements to the

Exchange’s Automatic Execution

system. Below is the text of the

proposed rule change. Proposed new

language is in italics.

* * * * *

Automatic Execution of Options Orders

Rule 933

(a)–(b) No change.

Commentary

.01(a) Orders to buy or sell options

that are multiply traded on one or more

options exchanges in addition to the

Exchange will not be automatically

executed at prices inferior to the current

best bid or offer displayed by any other

options exchange, as such best bids or

offers are identified by the Exchange’s

order routing system.

(b) Customer orders in those series of

options that have been specifically

designated by the Auto-Ex

Enhancements Committee (‘‘automatic

price matching series’’), under

circumstances where the Exchange’s

best bid or offer is inferior to the current

best bid or offer displayed by another

options exchange by no more than the

‘‘price matching amount,’’ as defined

below, will be automatically executed at

the current best bid or offer displayed by

the other options exchange. If the

Exchange’s best bid or offer is inferior to

the current best bid or offer displayed by

another options exchange by more than

the price matching amount, the order

will be routed to the specialist and not

automatically executed. Only customer

orders within the order size parameters

established by the Auto-Ex

Enhancements Committee will be

eligible for automatic price matching. A

customer order that exceeds the

established order size parameter will be

routed to the specialist and not

automatically executed.

(c) Customer orders in those series of

options that have been specifically

designed by the Auto-Ex Enhancements

Committee (‘‘automatic price

improvement series’’) will be

automatically executed when the

Exchange’s best bid or offer is equal to

the current best bid or offer by the price

improvement amount, as defined below.

Only customer orders within the order

size parameters established by the AutoEx Enhancements Committee will be

eligible for automatic price

improvement. A customer order that

exceeds the established order size

parameter will be either automatically

executed at the Exchange’s best bid or

offer if it is within the Auto-Ex order

size parameters, or it will be routed to

the specialist and not automatically

executed.

(d) Notwithstanding paragraphs (b)

and (c) above, orders for automatic

price matching series or automatic price

improvement series will be routed to the

specialist and not automatically

executed in situations where: (i) the

current best bid or offer for one of the

series is crossed (e.g., 4.20 bid, 4 asked)

or locked (e.g., 4 bid, 4 asked); (ii) the

specialist in conjunction with a Floor

governor or two Floor Officials

determined quotes in such options or

options exchange(s) are not reliable; or

(iii) the Exchange is experiencing

communications or systems problems,

‘‘fast markets,’’ or delays in the

dissemination of quotes by the Options

Price Reporting Authority (‘‘OPRA’’).

Members and member organizations

will be notified when the Exchange has

determined that quotes are not reliable

and prior to one or both Auto-Ex

Enhancements being shut off and

customer orders being routed to the

specialist for execution. The specialist

will report the execution or nonexecution of such orders to the firm that

Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Notices 13817

5Proposed subparagraph (d) of Commentary .01

of Amex Rule 933 is reorganized in this order to

clarify that orders for automatic price matching

series or automatic price improvement series will

be routed to the specialist and will not be

automatically executed if the specialist in

conjunction with a Floor Governor or two Floor

officials determines that quotes in such options or

options exchange(s) are not reliable and if the

Exchange is experiencing communications or

systems problems, ‘‘fast markets,’’ or delays in the

dissemination of quotes by OPRA. Telephone

conversation between Elizabeth King, Associate

Director, Nancy Sanow, Assistant Director, and

Jennifer Colihan, Special Counsel, Division,

Commission, and Claire McGrath, Vice President

and Special Counsel, Amex, on February 27, 2001.

6Proposed subparagraph (e) of Commentary .01 of

Amex Rule 933 provides that that Auto-Ex

Enhancement Committee shall determine the price

improvement amounts and order size parameters.

Telephone conversation between Nancy Sanow,

Assistant Director and Jenifer Colihan, Special

Counsel, Division, Commission, and Claire

McGrath, Vice President and Special Counsel,

Amex, on February 27, 2001.

originally forwarded the order to AutoEx.5

(e) As used in this Commentary, the

term ‘‘price matching amount’’ shall

mean the minimum increment for

options of that series established

pursuant to Rule 952, or any greater

amount established by the Auto-Ex

Enhancements Committee in respect of

specified automatic price matching

series of options. As used in this

Commentary, the term ‘‘price

improvement amount’’ shall mean the

minimum increment for options of that

series established pursuant to Rule 952,

or any greater amount established by

the Auto-Ex Enhancements Committee

in respect of specified automatic price

improvement series of options.6

* * * * *

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 the

Statutory Basis for, the Proposed Rule

Change

1. Purpose

The purpose of the proposed rule

change is to permit the implementation

of enhancements to the Exchange’s

Automatic Execution (‘‘Auto-Ex’’)

system. Auto-Ex executes, at the

displayed bid or offer, customer market

and marketable limit option orders up to

a specified number of contracts routed

through the Amex Order File (‘‘AOF’’).

There are, however, some situations in

which orders otherwise eligible for

execution on Auto-Ex are routed to the

specialist’s book (known as the Amex

Options Display Book (‘‘AODB’’)) for an

execution. These situations occur when

(i) the best bid or offer is represented by

a limit order on the AODB, (ii) the best

bid or offer is locked or crossed, or (iii)

there is a better bid or offer being

displayed by a competing market.

The Exchange now proposes to

enhance its automatic execution system

to provide automatic price matching

and improvement for certain orders

executed through Auto-Ex, thus

eliminating the need for these orders to

be routed to the AODB. The first

proposed enhancement will provide

automatic price matching on Auto-Ex

when the best bid or offer for that series

being displayed by a competing market

is within a specified number of trading

increments or ‘‘ticks’’ of the bid or offer

being displayed by the Amex (i.e., the

‘‘price matching amount’’). The second

proposed enhancement will provide

automatic price improvement on AutoEx for orders within the established

order size parameters when Amex is

displaying the best bid or offer and

specialists and registered options

traders wish to improve upon their own

bid or offer by a specified number of

trading increments (i.e., the ‘‘price

improvement amount’’).

A newly created committee, the AutoEx Enhancement Committee (the

‘‘Committee’’), will review and

designate which option classes or series

are eligible for either one or both of the

Auto-Ex enhancements upon the request

of a specialist. The Committee will be

comprised of the Exchange’s four Floor

Governors and the Chairmen (or their

designees) of the Specialists

Association, the Options Market Makers

Association and the Floor Brokers

Association. In determining which

option classes or series are eligible for

either one or both of the Auto-Ex

enhancements, the Committee may

consider such factors as the open

interest in the requested option; the

average daily volume of the option;

customer requests; and any other factors

as the Committee deems appropriate.

The Committee will also have the ability

to delete options from the list of those

eligible for the enhancements upon the

request of the specialist using the same

or similar criteria, including the

specialists’ ability to continue offering

either of the enhancements. The

Committee will also determine the price

matching and price improvement

amounts and the order size parameters.

The Exchange will publish a list of all

eligible options in an Information

Circular distributed to members.

a. Automatic Price Matching

The first proposed enhancement will

provide for the matching of the best bid

or offer displayed by a competing

market by allowing customer market

and marketable limit orders to be

automatically executed at that best bid

or offer provided it is within the

specified number of trading increments

or ticks of the Amex’s displayed bid or

offer, and the order is within the

established order size parameters.

Currently, the trading increment for an

option with a premium equal to or less

than $3.00 is 5 cents and for an option

with a premium greater than $3.00, the

trading increment is 10 cents. Thus, for

example, if the Amex displayed quote is

2–2.10, the best bid/offer displayed by

a competing market is 2–2.05, the

specified number of ticks is one and the

order size parameter is five contracts,

when an order is received on the Amex

to buy 5 contracts at the market, the

order will be automatically executed at

the offer price of 2.05. The enhancement

can be turned on at any level for an

option, by symbol, class put/call or

strike price. If an order is received and

the competing market’s best bid or offer

was not within the specified number of

ticks or the order size is larger than the

order size parameters, then the order

would be routed to the AODB for an

execution.

b. Automatic Price Improvement

The second enhancement will provide

for automatic price improvement

anytime the Amex quote is equal to the

best bid/offer and the option series has

been designated by the Auto-Ex

Enhancement Committee. Through this

enhancement, automatic price

improvement will be provided based

upon a predefined number of ticks and

for orders within the established order

size parameter. For example, if the

Amex displayed quote is the best bid

and offer at 2–2.10, the predefined

number of ticks is one and the order size

parameter is five when an order is

received on the Amex to buy 5 contracts

at the market, the order will be

automatically executed at an improved

price of 2.05. If the order size is for a

number of contracts that exceeds the

order size parameters, such orders will

be automatically executed at the best

bid/offer. This enhancement may be

turned on for any option, by symbol,

class, put/call or strike price.

13818 Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Notices

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

8 15 U.S.C. 78f(b)(5).

9 15 U.S.C. 78s(b)(3)(A).

10 15 CFR 240.19b–4(f)(6).

11For purposes only of accelerating the operative

date of this proposal, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

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

12The Commission notes that its decision to

accelerate the operative date of this rule change is

not dispositive of whether all aspects of the new

Commentary comply with the terms and conditions

of section IV.h.(i)(bb) of the Order Instituting Public

Administrative Proceedings Pursuant to section

19(h)(1) of the Securities Exchange Act of 1934,

Making Findings and Imposing Remedial Sanctions

(the ‘‘Order’’). The parties to the Order, including

the Exchange, are required to ‘‘specify the

circumstances, if any, under which automated

execution systems can be disengaged or operated in

any manner other than the normal manner set forth

in the exchange’s rules and require the

documentation of the reasons for each decision to

disengage an automated execution system or

operate it in any manner other than the normal

manner.’’ The Order further provides that parties to

the Order must submit to the Commission staff draft

proposed rule changes that comply with the

requirements set forth above no later than six

months from the date of the Order. See Securities

Exchange Act Release No. 43268 (September 11,

2000). 13See Securities Exchange Act Release Nos.

43285 (September 12, 2000), 65 FR 56972

(September 20, 2000) (approving SR–CBOE–93–22);

40096 (June 16, 1998), 63 FR 34209 (June 23, 1998)

(approving SR–CBOE–98–13); 41821 (September 1,

1999), 64 FR 50313 (September 16, 1999)

(approving SR–CBOE–99–17); 42167 (November 22,

1999), 64 FR 66954 (November 30, 1999) (approving

SR–CBOE–99–57). 14See Securities Exchange Act Release No. 43684

(December 6, 2000), 65 FR 78238 (December 14,

2000) (partially approving SR–Phlx–00–93). 15 15 U.S.C. 78f(b)(8).

Neither enhancement will apply if the

current best bid or offer is locked or

crossed. Further, the enhancements will

not apply when the specialist in

conjunction with a Floor Governor or

two Floor Officials determines that

quotes in such options or market(s) are

deemed not to be reliable. This

authority would be expected to be

exercised only in circumstances such as

communications or systems problems;

fast markets; delays in the

dissemination of quotes because of

queues on the Option Price Reporting

Authority (‘‘OPRA’’) (in which case the

Exchange would know that there is a

delay in the dissemination of quotes

from the other exchanges, which would

likely render such quotes stale) or if the

Exchange is advised by another

exchange that it is experiencing

communications or system problems

that would cause its disseminated

quotes to be unreliable. Also, neither

enhancement will apply if the Exchange

is experiencing communications or

systems problems; fast markets; or

delays in the dissemination of quotes by

OPRA.

The Exchange believes the

implementation of the proposed price

matching and improvement

enhancements will benefit investors by

providing investors with automatic

executions at prices equal to or better

than the current best bid/offer and

greatly enhance speed of execution and

order turn-around times.

2. Basis

The proposed rule change is

consistent with section 6(b) of the Act 7

in general and furthers the objectives of

section 6(b)(5) 8 in particular in that it is

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

facilitating transactions in securities,

and to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system.

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.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants or Others

Written comments were neither

solicited nor received with respect to

the proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has been

filed by the Exchange as a ‘‘noncontroversial’’ rule change pursuant to

Section 19(b)(3)(A) of the Act 9 and

subparagraph (f)(6) of Rule 19b–4

thereunder.10 Because the foregoing

proposed rule change: (i) Does not

significantly affect the protection of

investors or the public interest; (ii) does

not impose any significant burden on

competition; and (iii) by its terms, does

not become operative for 30 days after

the date of the filing, or such shorter

time as the Commission may designate

if consistent with the protection of

investors and the public interest;

provided that the Exchange has given

the Commission written notice of its

intent to file the proposed rule change

at least five business days prior to the

filing date of the proposed rule change,

it has become effective pursuant to

section 19(b)(3)(A) of the Act and Rule

19b–4(f)(6).

The Exchange has requested that the

Commission accelerate the operative

date of the proposal. In addition, the

Exchange provided the Commission

with written notice of its intent to file

the proposed rule change, along with a

brief description and text of the

proposed rule change, more than five

business days prior to the date of the

filing of the proposed rule change. The

Commission finds that it is appropriate

to accelerate the operative date of the

proposal and designate the proposal to

become operative today.11

The Commission finds good cause for

accelerating the operative date of the

proposed rule change.12 The

Commission notes that it has approved

similar proposals filed by the Chicago

Board Options Exchange (‘‘CBOE’’) 13

and the Philadelphia Stock Exchange,

Inc. (‘‘Phlx’’).14 Approval of this

proposal on an accelerated basis will

enable the Amex to compete on an equal

basis with these other exchanges and

thus is consistent with section 6(b)(8) of

the Act.15

At any time within 60 days of the

filing of the 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 Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing,

including whether the proposal is

consistent with the Act. Persons making

written submissions should file fix

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 filing will also be

available for inspection and copying at

the principal office of the Amex. All

submissions should refer to file number

SR–Amex–01–05 and should be

submitted by March 28, 2001.

Federal Register / Vol. 66, No. 45 / Wednesday, March 7, 2001 / Notices 13819

16 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. 42894

(June 2, 2000), 65 FR 36850 (June 12, 2000). The

pilot program has since been extended twice. See

Securities Exchange Act Release Nos. 43229

(August 30, 2000), 65 FR 54572 (September 8,

2000); and 43643 (November 29, 2000), 65 FR 76686

(December 7, 2000).

4Facilitation cross transactions occur when a

floor broker representing the order of a public

customer of a member firm crosses that order with

a contra side order from the firm’s proprietary

account.

5Amex trading practices provide specialists with

a greater than equal participation in trades that take

place at a price at which the specialist is on parity

with registered options traders in the crowd. These

practices are subject to a separate filing that seeks

to codify specialist allocation practices. See

Securities Exchange act Release No. 42964 (June 20,

2000), 65 FR 39972 (June 28, 2000).

6See File No. SR–Amex–00–49, available for

inspection at the Commission’s Public Reference

Room.

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

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

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

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.16

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–5540 Filed 3–6–01; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–44019; File No. SR–Amex–

01–10]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval to Proposed

Rule Change by the American Stock

Exchange LLC to Extend for an

Additional 90 Days Its Pilot Program

Relating to Facilitation Cross

Transactions

February 28, 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 February

27, 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 and II 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. For the

reasons discussed below, the

Commission is granting accelerated

approval of the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Amex proposes to extend for an

additional 90 days its pilot program

relating to facilitation cross transactions,

described in detail in Part II.A. below.

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

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 III below. The Exchange 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 extend for

an additional 90 days its pilot program

relating to member firm facilitation

cross transactions approved by the

Commission on June 2, 2000.3 Revised

Commentary .02(d) to Amex Rule 950(d)

establishes a pilot program to allow

facilitation cross transactions in equity

options.4 The pilot program entitles a

floor broker, under certain conditions,

to cross a specified percentage of a

customer order with a member firm’s

proprietary account before market

makers in the crowd can participate in

the transaction. The provision generally

applies to orders of 400 contracts or

more. However, the Exchange is

permitted to establish smaller eligible

order sizes, on a class by class basis,

provided that the eligible order size is

not for fewer than 50 contracts.

Under the current program, when a

trade takes place at the market provided

by the crowd, all public customer orders

on the specialist’s book or represented

in the trading crowd at the time the

market was established must be satisfied

first. Following satisfaction of any

customer orders on the specialist’s book,

the floor broker is entitled to facilitate

up to 20% of the contracts remaining in

the customer order. When a floor broker

proposes to execute a facilitation cross

at a price between the best bid and offer

provided by the crowd in response to

his initial request for a market—and the

crowd then wants to take part or all of

the order at the improved price—the

floor broker is entitled to priority over

the crowd to facilitate up to 40% of the

contracts. If the floor broker has

proposed the cross at a price between

the best bid and offer provided by he

crowd in response to his initial request

for a market, and the trading crowd

subsequently improves the floor

broker’s price, and the facilitation cross

is executed at that improved price, the

floor broker would only be entitled to

priority to facilitate up to 20% of the

contracts.

The program also provides that if the

facilitation transaction takes place at the

specialist’s quoted bid or offer, any

participation allocated to the specialist

pursuant to Amex trading floor practices

would apply only to the number of

contracts remaining after all public

customer orders have been filled and

the member firm’s crossing rights have

been exercised.5 However, in no case

could the total number of contracts

guaranteed to the member firm and the

specialist exceed 40% of the facilitation

transaction.

In the almost nine months since the

pilot program began, the Exchange has

found it to be generally successful. The

Exchange seeks to extend the pilot

program for an additional 90 days,

pending consideration of a related

proposed rule change it has filed with

Commission 6 concerning revisions to

the program that the Amex believes will

provide further incentive for price

improvement by using different

procedures to determine specialist and

registered option trader participation.

The related proposal would also make

the program permanent.

Because the pilot program is due to

expire on February 27, 2001, the Amex

has requested that the Commission

expedite review of, and grant

accelerated approval to, the proposal to

extend it, pursuant to section 19(b)(2) of

the Act.7

2. Statutory Basis

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)

of the act 9 in particular 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.