Document ID: SEC-2007-0576-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2007-04-20T04:00Z

[Federal Register: April 20, 2007 (Volume 72, Number 76)]
[Notices]               
[Page 19988-19990]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20ap07-124]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55636; File No. SR-Amex-2007-32]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Shorten the Minimum Required Time Periods Required Between Tape 
Indications and Openings or Reopenings

April 16, 2007.
    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 30, 2007, 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 Amex. The Exchange has 
filed the proposal pursuant to Section 19(b)(3)(A) of the Act,\3\ and 
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposal effective 
upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Amex Rules regarding openings 
and halts in trading to shorten the minimum time periods required 
between tape indications and openings or reopenings. The Exchange has 
designated this proposal as non-controversial and has requested that 
the Commission waive the 30-day pre-operative waiting period contained 
in Rule 19b-4(f)(6)(iii) under the Act.\5\
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    \5\ 17 CFR 240.19b-4(f)(6)(iii).
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    The text of the proposed rule change is available on the Amex's Web 
site at http://www.amex.com, the Office of the Secretary, the Amex and 

at the Commission's Public Reference Room.

[[Page 19989]]

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, 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 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
    Specialists in equity-traded securities \6\ are responsible for 
ensuring that their specialty securities open for trading as close to 
the opening bell as possible, and reopen for trading after a trading 
halt as soon as possible. After a trading halt, the specialist must 
strive to open or reopen a security in a manner that is not only 
timely, but is also fair and orderly.
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    \6\ Equity-traded securities include stocks (both listed and 
those trading on an Unlisted Trading Privileges Basis), Exchange 
Traded Funds, and other securities that trade like equities. See 
Amex Rule 1A-AEMI(c).
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    Ordinarily, before the opening bell, the specialist will assess 
existing market conditions and consider the balance of supply and 
demand for a security as reflected by orders represented in the market. 
Under certain conditions, he or she may provide this information to the 
market in the form of price indications that are published on the 
consolidated tape. In the event of a delayed opening, or the reopening 
of trading in a security after a trading halt, the specialist may be 
required to assess market conditions prior to the delayed opening or 
reopening, and publish a price indication to the market accordingly, 
while providing market participants with sufficient time to react and 
participate as they deem appropriate.
    Current rules require minimum time periods as long as ten minutes 
between a specialist's dissemination of a price indication and the 
delayed opening or reopening of trading. Technological developments 
have increased the speed of communication since these rules were 
introduced, and market conditions may change substantially within the 
time periods now required between the indication and the opening or 
resumption of trading. Accordingly, the Exchange is proposing an 
amendment to the rules to provide flexibility to react quickly, when 
appropriate, by reducing the minimum amount of time required between 
indications and delayed openings or reopenings after a trading halt.
    Amex Rule 119-AEMI (governing indications, openings and reopenings) 
currently provides that the specialist may not open or reopen a stock 
that has been the subject of a halt or delayed opening until ten 
minutes have elapsed following the first indication. Where there is 
more than one indication, a minimum of five minutes must elapse from 
the last indication, provided that at least ten minutes has elapsed 
since the first indication. The Exchange proposes that these minimum 
time periods be shortened from ten minutes to three minutes after the 
first indication, and from three minutes to one minute after the last 
indication, provided that a minimum of three minutes have elapsed since 
the first indication.
    For a stock that is halted during the trading day, current rules 
require a minimum of five minutes between the first indication and the 
stock's reopening. Where there is more than one indication, a minimum 
of three minutes must elapse from the last indication, provided that at 
least five minutes have elapsed after the first indication. The 
Exchange proposes that these time periods be shortened from five 
minutes to three minutes after the first indication, and from three 
minutes to one minute after the last indication, provided that a 
minimum of three minutes has elapsed after the dissemination of the 
first indication.
    If a stock is halted during the trading day due to an ``equipment 
changeover,'' a minimum of five minutes must elapse following the halt 
before trading resumes. Should a significant order imbalance develop 
\7\ or a regulatory condition occur (i.e., news pending or news 
dissemination), current rules require a ten minute minimum halt period 
following the first indication before reopening for trading. The 
Exchange now proposes that the standard five minute period after an 
``equipment changeover'' be shortened to one minute and the ten minute 
period be shortened to three minutes after an ``equipment changeover'' 
during which a significant order imbalance or regulatory condition 
develops.
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    \7\ A ``significant order imbalance'' is one which would result 
in a reopening at a price change constituting the greater of 1% or 
two points away from the last previous sale in a stock selling at 
$20 or more, one point or more away from the last previous sale in a 
stock selling at $10 or more (but less than $20), and one/half point 
or more away from the last previous sale in a stock selling at less 
than $10. See Amex Rule 119-AEMI(3)(a).
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    The Exchange further proposes amendments to Exchange Rule 118-AEMI, 
Trading in Nasdaq Securities, to conform the minimum time periods 
required for openings and reopenings in securities traded on the Amex 
on an unlisted trading privileges basis to those proposed for listed 
securities. Additionally, the Exchange proposes a housekeeping change 
where references to a ``Floor Governor'' in Rule 119-AEMI would be 
changed to ``Senior Floor Official'' reflecting that the authority 
granted to a Floor Governor can be exercised by a Senior Floor 
Official.\8\
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    \8\ The Commission approved an amendment to Amex Rule 21 which 
provides that: ``An Exchange Official who has been appointed as a 
Senior Floor Official has the same authority and responsibilities as 
a Floor Governor with respect to matters that arise on the Floor and 
require review or action by a Floor Governor or Senior Floor 
Official.'' See Securities Exchange Act Release 51503 (April 7, 
2005), 70 FR 19534 (April 13, 2005) (SR-Amex-2004-65).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) \9\ of the 
Act in general and furthers the objectives of Section 6(b)(5) \10\ 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.
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    \9\ 15 U.S.C. 78f.
    \10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The proposed rule change will impose no 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 solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change is subject to Section 
19(b)(3)(A)(iii) of the Act \11\ and Rule 19b-4(f)(6) thereunder \12\ 
because the proposal: (i) Does not significantly affect the protection 
of

[[Page 19990]]

investors or the public interest; (ii) does not impose any significant 
burden on competition; and (iii) does not become operative prior to 30 
days after the date of 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 
notice of its intent to file the proposed rule change, along with a 
brief description and text of the proposed rule change, at least five 
business days prior to the date of filing of the proposed rule change, 
or such shorter time as designated by the Commission.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \12\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after the date of the filing. 
However, pursuant to Rule 19b-4(f)(6)(iii),\13\ the Commission may 
designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange has asked 
the Commission to waive the 30-day operative delay.\14\ The Commission 
believes that such waiver is consistent with the protection of 
investors and the public interest because the proposed changes to the 
required minimum time periods between tape indications and openings and 
reopenings are substantially similar to a recently approved proposal 
submitted by the New York Stock Exchange LLC (``NYSE'').\15\ For this 
reason, the Commission designates the proposed rule change to be 
operative on April 2, 2007, as the Exchange proposed.\16\
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    \13\ 17 CFR 240.19b-4(f)(6)(iii).
    \14\ Id.
    \15\ The Commission recently approved a substantially similar 
proposal from the NYSE that included identical changes to the 
required minimum time periods between tape indications and openings 
and reopenings. See Securities Exchange Act Release No. 54530 
(September 28, 2006), 71 FR 58645 (October 3, 2006) (SR-NYSE-2006-
49).
    \16\ For 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).
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    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.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-Amex-2007-32 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-Amex-2007-32. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). 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 the filing 
also will be available for inspection and copying at the principal 
office of the Amex. All comments received will be posted without 
change; the Commission does not edit personal identifying information 
from submissions. You should submit only information that you wish to 
make available publicly. All submissions should refer to File Number 
SR-Amex-2007-32 and should be submitted on or before May 11, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E7-7553 Filed 4-19-07; 8:45 am]

BILLING CODE 8010-01-P