Document ID: SEC-2005-0153-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2005-10-26T04:00Z

[Federal Register: October 26, 2005 (Volume 70, Number 206)]
[Notices]               
[Page 61854]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26oc05-135]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52646; File No. SR-Amex-2005-068]

 
Self-Regulatory Organizations; American Stock Exchange LLC; Order 
Granting Approval of Proposed Rule Change and Amendment Nos. 1 and 2 
Thereto Relating to Amendments to Amex Rules 26 and 27

October 20, 2005.
    On June 17, 2005, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed 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 to: (i) Combine the Equities, Options and Special 
Allocations Committees into a single Allocations Committee; (ii) change 
the composition of the new Allocations Committee; and (iii) provide the 
Performance Committee with sole authority to reallocate securities in 
connection with specialist unit transfers resulting from business 
transactions. On June 30, 2005, Amex filed Amendment No. 1 to the 
proposed rule change.\3\ On August 19, 2005, Amex filed Amendment No. 2 
to the proposed rule change.\4\ The proposed rule change, as amended, 
was published for comment in the Federal Register on September 1, 
2005.\5\ The Commission received no comments on the proposal. This 
order approves the proposed rule change, as amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange made a technical correction 
to the proposed amendment to Amex Rule 26 and proposed to amend Amex 
Rule 27 to reflect that, in the case of an equity security, the list 
of qualified specialists shall consist of five specialists.
    \4\ In Amendment No. 2, the Exchange proposed to amend Amex Rule 
27 to clarify: (1) the composition of the Allocations Committee for 
equities and other securities admitted for trading on the Exchange 
except Exchange Traded Funds (``ETFs'') and options; and (2) that 
the Allocations Committee may be chaired by the Chief Executive 
Officer's designee.
    \5\ See Securities Exchange Act Release No. 52334 (August 25, 
2005), 70 FR 52146.
---------------------------------------------------------------------------

    The proposed rule change would combine the existing Equity, Options 
and Special Allocations Committees into a single Allocations Committee 
for equities, options and other listed securities. The proposal would 
create a single Allocations Committee consisting of the Chief Executive 
Officer (or his or her designee \6\), a representative of an upstairs 
member firm and either: (i) Four (4) brokers for equities and other 
securities admitted to trading on the Exchange except for Exchange 
Traded Funds and options; (ii) two (2) brokers and two (2) Registered 
Traders for ETFs; or (iii) two (2) brokers and two (2) Registered 
Options Traders for options. The Chief Executive Officer (or his or her 
designee) would chair the Allocations Committee and would not vote 
except to make or break a tie. In the absence of the Chief Executive 
Officer (or his or her designee), a Floor Governor or a Senior Floor 
Official may chair the Allocation Committee. In addition, the Exchange 
proposes to permit the Performance Committee to reallocate securities 
in connection with specialist unit transfers resulting from business 
transactions.
---------------------------------------------------------------------------

    \6\ The Exchange represents that the designee of the Chief 
Executive Officer would be an Exchange employee knowledgeable about 
the securities business and capable of representing the views of the 
Chief Executive Officer. Telephone conversation of October 12, 2005, 
between Jeffery Burns, Associate General Counsel, Amex, and David 
Michehl, Attorney, Division of Market Regulation, Commission.
---------------------------------------------------------------------------

    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of section 6 of the Act,\7\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.\8\ In particular, the Commission finds that the proposed rule 
change is consistent with section 6(b)(5) of the Act,\9\ which 
requires, among other things, that the Exchange's rules be 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. The Commission 
believes that, by combining the Equities, Options and Special 
Allocations Committees into a single Allocations Committee and 
streamlining the composition of the Allocations Committee, the proposed 
rule change is designed to reduce potential inefficiencies in 
connection with the securities allocation process. In addition, the 
Commission believes that, by providing the Performance Committee with 
the sole authority to reallocate securities in connection with 
specialist unit transfers, the proposed rule change is designed to 
streamline the reallocation process in these special circumstances.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\10\ that the proposed rule change (SR-Amex-2005-068), as amended, 
is approved.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
[FR Doc. E5-5946 Filed 10-25-05; 8:45 am]

BILLING CODE 8010-01-P