Document ID: SEC-2006-0838-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-06-30T04:00Z

[Federal Register: June 30, 2006 (Volume 71, Number 126)]
[Notices]               
[Page 37627-37629]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr30jn06-112]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54039; File No. SR-Amex-2006-58]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of a Proposed Rule Change Relating to an Amendment to 
Amex Rule 27

June 23, 2006.
    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 9, 2006, 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 Amex. 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 Exchange proposes to amend Amex Rule 27 to revise the number 
and composition of the Allocation Committee (the ``Allocations 
Committee'' or the ``Committee'').
    The text of the proposed rule change is available on the Amex's Web 
site (http://www.amex.com), the Office of the Secretary, Amex, and at 

the Commission's Public Reference Room.
    The text of the proposed rule change also appears below. Proposed 
new language is italicized; proposed deletions are in [brackets].

Rule 27. Allocations Committee

    (a) The Allocations Committee allocates equity securities of 
operating companies, equity options admitted to dealings on the 
Exchange and all other securities to be admitted for trading on the 
Exchange. It consists of [six] eight persons drawn from a roster of 
approximately 75 persons and is comprised as follows: the Chief 
Executive Officer (or his or her designee), a representative of an 
upstairs member firm and either (i) [four (4)] six (6) brokers for 
equities and other securities admitted to trading on the Exchange 
except for Exchange Traded Funds and options; (ii) [two (2)] three (3) 
brokers and [two (2)] three (3) Registered Traders for Exchange Traded 
Funds; or (iii) [two (2)] three (3) brokers and [two (2)] three (3) 
Registered

[[Page 37628]]

Options Traders for options. The Allocations Committee is chaired by 
the Chief Executive Officer (or his or her designee) who does 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 Committee. The minimum quorum for the 
transaction of business by the Allocations Committee shall be four 
persons. The upstairs member firm representative may attend meetings by 
telephone.
    (b) through (i) No Change.
    Commentary * * *
    .01 through .05 No Change.

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 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to change the number and composition of the 
Allocation Committee from six (6) to eight (8) members. Currently, the 
Committee consists of the Chief Executive Officer (or his or her 
designee), 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 Exchange Traded Funds; 
or (iii) two (2) brokers and two (2) Registered Options Traders for 
options. The Exchange proposes an amendment to Amex Rule 27 to revise 
the number and composition of the Allocations Committee so that the 
Committee consists of the Chief Executive Officer of the Exchange (or 
his or her designee), a representative of an upstairs member firm and 
either: (i) Six (6) brokers for equities and other securities admitted 
to trading on the Exchange except for Exchange Traded Funds and 
options; (ii) three (3) brokers and three (3) Registered Traders for 
Exchange Traded Funds; or (iii) three (3) brokers and three (3) 
Registered Options Traders for options. The minimum quorum requirement 
would remain at four (4) persons.\3\
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    \3\ The Commission notes that the Allocations Committee is 
chaired by the Chief Executive Officer (or his or her designee) who 
does not vote except to make or break a tie. See Amex Rule 27(a).
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    Article II, Section 3 of the Amex Constitution provides the Board 
of Governors (``Board'') with the authority to allocate and reallocate 
the equity securities of operating companies (``equities''), options 
and other securities listed on the Exchange. The Board, in connection 
with the allocation and reallocation of equities, Exchange Traded 
Funds, options and other securities admitted to trading on the 
Exchange, has delegated this authority to the Allocations Committee.\4\ 
In October 2005, the Commission approved an Exchange proposal to 
combine the separate Equities Allocation Committee, Options Allocation 
Committee and Special Allocation Committee into one (1) Allocations 
Committee.\5\ Pursuant to the Approval Order, the number and 
composition of the Allocations Committee was changed from eleven (11) 
to the current six (6) members.
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    \4\ See Amex Rule 27(a).
    \5\ See Securities Exchange Act Release No. 52646 (October 20, 
2005), 70 FR 61854 (October 26, 2005) (``Approval Order'').
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    The Exchange states that the experience of the Exchange to date has 
revealed that due to the smaller number of members of the Allocations 
Committee, the minimum quorum requirement of four (4) persons to 
conduct business has become overly burdensome. In many cases, the 
Allocations Committee fails to meet the minimum quorum requirement to 
transact business. Accordingly, the Exchange believes that this 
proposal to increase the number of Allocations Committee Members from 
the current six (6) to eight (8) will provide greater flexibility and 
efficiency in the securities allocation process.
    The Exchange believes that this proposal is necessary because of 
the difficulty in meeting the minimum quorum requirement with a reduced 
number of Committee members adopted in October 2005. Accordingly, the 
Exchange believes that the proposed change to the number and 
composition of the Allocations Committee is needed to ensure that the 
Allocations Committee is better able to meet the minimum quorum 
requirement.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the provisions of section 6(b) of the Act,\6\ in general, and with 
section 6(b)(5) of the Act,\7\ 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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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
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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 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 Exchange did not receive any 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 self-regulatory organization 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 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-2006-58 on the subject line.

[[Page 37629]]

Paper Comments

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

All submissions should refer to File Number SR-Amex-2006-58. 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 such 
filing also will be available for inspection and copying at the 
principal office of the Exchange. 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-2006-58 and should be submitted on or before July 
21, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. 06-5906 Filed 6-29-06; 8:45 am]

BILLING CODE 8010-01-P