Document ID: SEC-2006-1357-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-10-19T04:00Z

[Federal Register: October 19, 2006 (Volume 71, Number 202)]
[Notices]               
[Page 61811-61815]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19oc06-138]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54595; File No. SR-Amex-2006-78]

 
 Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing of a Proposed Rule Change and Amendment No. 1 Thereto 
Relating to Generic Listing Standards for Series of Portfolio 
Depositary Receipts and Index Fund Shares Based On International or 
Global Indexes

October 12, 2006.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on August 18, 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 the 
Exchange. On October 12, 2006, submitted Amendment No. 1 to the 
proposal.\3\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240. 19b-4.
    \3\ In Amendment No. 1, Amex revised the proposed rule text and 
clarified certain aspects of its proposal.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to revise Amex Rules 1000 and 1000A to 
include generic listing standards for series of portfolio depositary 
receipts (``PDRs'') and index fund shares (``IFSs'') that are based on 
international or global indexes or on indexes. Additionally, the 
Exchange proposes to revise Amex Rules 1000 and 1000A to include 
generic listing standards for PDRs and IFSs that are based on indexes 
or portfolios previously approved by the Commission as an underlying 
benchmark for the trading of PDRs, IFSs, options or other specified 
index-based securities. The Amex also proposes to make minor changes to 
Amex Rules 1000, 1002, 1000A and 1002A.
    The text of the proposed rule change is available on the Amex's Web 
site (http://www.amex.com), at Amex's principal office, and at the 

Commission's Public Reference Room. The text of Exhibit 5 to the 
proposed rule change is also available on the Commission's Web site 
(http://www.sec.gov/rules/sro.shtml).

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 Exchange proposes to revise Commentary .03 to Rule 1000 and 
Commentary .02 to Rule 1000A to include generic listing standards for 
series of PDRs and IFSs (PDRs and IFSs together referred to as 
``exchange-traded funds'' or ``ETFs'') that are based on international 
or global indexes, or on indexes previously approved by the Commission 
under Section 19(b)(2) of the Exchange Act for the trading of ETFs, 
options or other index-based securities. This proposal will enable the 
Exchange to list and trade exchange-traded funds pursuant to Rule 19b-
4(e) \4\ of the Exchange Act if each of the conditions set forth in 
Commentary .03 to Rule 1000 or Commentary .02 to Rule 1000A is 
satisfied. Rule 19b-4(e) provides that the listing and trading of a new 
derivative securities product by a self-regulatory organization 
(``SRO'') shall not be deemed a proposed rule change, pursuant to 
paragraph (c)(1) of Rule 19b-4, if the Commission has approved, 
pursuant to Section 19(b) of the Exchange Act, the SRO's trading rules, 
procedures and listing standards for the product class that would 
include the new derivatives securities product, and the SRO has a 
surveillance program for the product class.\5\
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    \4\ 17 CFR 240.19b-4(e).
    \5\ When relying on Rule 19b-4(e), the SRO must submit Form 19b-
4(e) to the Commission within five business days after the SRO 
begins trading the new derivative securities products. See 
Securities Exchange Act Release No. 40761 (December 8, 1998), 63 FR 
70952 (December 22, 1998).
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Exchange-Traded Funds
    Amex Rules 1000 et seq. allow for the listing and trading on the 
Exchange of PDRs. PDRs represent interests in a unit investment trust 
registered under the Investment Company Act of 1940 \6\ (``1940 Act'') 
that operates on an open-end basis and that holds the securities that 
comprise an index or portfolio. Amex Rules 1000A et seq. provide 
standards for the listing and trading of IFSs, which are securities 
issued by an open-end management investment company (open-end mutual 
fund) based on a portfolio of stocks or fixed income securities that 
seeks to provide investment results that correspond generally to the 
price and yield performance of a specified foreign or domestic stock 
index or fixed income securities index. Pursuant to Rules 1000 et seq. 
and 1000A et seq., PDRs and IFSs must be issued in a specified 
aggregate minimum number in return for a deposit of specified 
securities and/or a cash amount, with a value equal to the next 
determined net asset value. When aggregated in the same specified 
minimum number, PDRs and IFSs must be redeemed by the issuer for the 
securities and/or cash, with a value equal to the next determined net 
asset value. The net asset value is calculated once a day after the 
close of the regular trading day.
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    \6\ 15 U.S.C. 80a.
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    To meet the investment objective of providing investment returns 
that correspond to the price, dividend and yield performance of the 
underlying index, ETFs may use a ``replication'' strategy or a 
``representative sampling'' strategy with respect to the ETF 
portfolio.\7\ An ETF, using a replication strategy, will invest in each 
stock found in the underlying index in about the same proportion as 
that stock is represented in the index itself. An ETF, using a 
representative sampling strategy, will generally invest in a 
significant number of the component securities of the underlying index, 
but it may not invest in all of the component securities of its 
underlying index and will hold stocks that, in the aggregate, are 
intended to approximate the full index in terms of key characteristics, 
such as

[[Page 61812]]

price/earnings ratio, earnings growth, and dividend yield.
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    \7\ In either case, many ETFs, by their terms, may be considered 
invested in the securities of the underlying index to the extent the 
ETFs invest in sponsored American Depositary Receipts (``ADRs''), 
Global Depositary Receipts (``GDRs''), or European Depositary 
Receipts (``EDRs'') representing securities in the underlying index 
that trade on an exchange with last sale reporting.
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    In addition, ETF portfolios may be adjusted in accordance with 
changes in the composition of the underlying indexes or to maintain 
compliance with requirements applicable to a regulated investment 
company under the Internal Revenue Code (``IRC'').\8\
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    \8\ In order for an ETF to qualify for tax treatment as a 
regulated investment company, it must meet several requirements 
under the IRC. Among these is the requirement that, at the close of 
each quarter of the ETF's taxable year, (i) at least 50% of the 
market value of the ETF's total assets must be represented by cash 
items, U.S. government securities, securities of other regulated 
investment companies and other securities, with such other 
securities limited for purposes of this calculation in respect of 
any one issuer to an amount not greater than 5% of the value if the 
ETF's assets and not greater than 10% of the outstanding voting 
securities of such issuer, and (ii) not more than 25% of the value 
of its total assets may be invested in the securities of any one 
issuer, or two or more issuers that are controlled by the ETF 
(within the meaning of Section 851 (b)(4)(B) of the IRC) and that 
are engaged in the same or similar trades or businesses or related 
trades or business (other than U.S. government securities or the 
securities of other regulated investment companies).
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Generic Listing Standards for Exchange-Traded Funds
    The Exchange notes that the Commission has previously approved 
generic listing standards pursuant to Rule 19b-4(e) \9\ of the Exchange 
Act for ETFs based on indexes that consist of stocks listed on U.S. 
exchanges.\10\ In general, the proposed criteria for the underlying 
component securities in the international and global indexes are 
similar to those for the domestic indexes, but with modifications as 
appropriate for the issues and risks associated with non-U.S. 
securities.
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    \9\ 17 CFR 240.19b-4(e).
    \10\ See Commentary .03 to Amex Rule 1000 and Commentary .02 to 
Amex Rule 1000A. See also Securities Exchange Act Release No. 42787 
(May 15, 2000), 65 FR 33598 (May 24, 2000).
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    In addition, the Commission has previously approved the listing and 
trading of ETFs based on international indexes--those based on non-U.S. 
component stocks--as well as global indexes--those based on non-U.S. 
and U.S. component stocks.\11\
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    \11\ See, e.g., Securities Exchange Act Release Nos. 50189 
(August 12, 2004), 69 FR 51723 (August 20, 2004) (approving the 
listing and trading of certain Vanguard International Equity Index 
Funds); 44700 (August 14, 2001), 66 FR 43927 (August 21, 2001) 
(approving the listing and trading of series of the iShares Trust 
based on certain S&P global indexes).
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    The Exchange notes that the Commission has also approved listing 
standards for other index-based derivatives that permit the listing and 
trading pursuant to Rule 19b-4(e) \12\ of such securities where the 
Commission had previously approved the trading of specified index-based 
derivatives on the same index, on the condition that all of the 
standards set forth in those orders, in particular with respect to 
surveillance sharing agreements, continued to be satisfied.\13\
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    \12\ 17 CFR 240.19b-4(e).
    \13\ See Amex Company Guide Section 107D (Index-Linked 
Securities), Securities Exchange Act Release No. 51563 (April 15, 
2005), 70 FR 21257 (April 25, 2005).
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    In approving ETFs for Exchange trading, the Exchange states that 
the Commission thoroughly considered the structure of the ETFs, their 
usefulness to investors and to the markets, and Amex rules that govern 
their trading. The Exchange believes that adopting additional generic 
listing standards for these ETFs based on international and global 
indexes and applying Rule 19b-4(e) \14\ should fulfill the intended 
objective of that Rule by allowing those ETFs that satisfy the proposed 
generic listing standards to commence trading, without the need for the 
public comment period and Commission approval. The proposed rules have 
the potential to reduce the time frame for bringing ETFs to market, 
thereby reducing the burdens on issuers and other market participants. 
The failure of a particular ETF to comply with the proposed generic 
listing standards under Rule 19b-4(e) \15\ would not, however, preclude 
the Exchange from submitting a separate filing pursuant to Section 
19(b)(2),\16\ requesting Commission approval to list and trade a 
particular ETF.
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    \14\ 17 CFR 240.19b-4(e).
    \15\ 17 CFR 240.19b-4(e).
    \16\ 15 U.S.C. 78s(b)(2).
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Requirements for Listing and Trading ETFs Based on International and 
Global Indexes
    The Exchange states that exchange-traded funds listed pursuant to 
these generic standards for international and global indexes would be 
traded, in all other respects, under the Exchange's existing trading 
rules and procedures that apply to ETFs and would be covered under the 
Exchange's surveillance program for ETFs.\17\
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    \17\ See Amex Rules 1000 through 1006 and 1000A through 1005A.
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    In order to list a PDR or an IFS pursuant to the proposed generic 
listing standards for international or global indexes, the index 
underlying the PDR or IFS must satisfy all the conditions contained in 
proposed Commentary .03 to Rule 1000 (for PDRs) or proposed Commentary 
.02 to Rule 1000A (for IFSs). As with the existing generic standards 
for ETFs based on domestic indexes, the Exchange states that these 
generic listing standards are intended to ensure that stocks with 
substantial market capitalization and trading volume account for a 
substantial portion of the weight of an index or portfolio. While the 
standards in this proposal are based on the standards contained in the 
current generic listing standards for ETFs based on domestic indexes, 
they have been adapted as appropriate to apply to international and 
global indexes.
    As proposed, the definition section of each of Rule 1000 and Rule 
1000A--section (b)--would be revised to include definitions of US 
Component Stock and Non-US Component Stock. These new definitions would 
provide the basis for the standards for indexes with either domestic or 
international stocks, or a combination of both. A ``Non-US Component 
Stock'' would mean an equity security issued by an entity that (a) is 
not organized, domiciled or incorporated in the United States; (b) is 
not registered under Sections 12(b) or 12(g) of the Exchange Act; and 
(c) is an operating company (including Real Estate Investment Trusts 
(REITS) and income trusts, but excluding investment trusts, unit 
trusts, mutual funds, and derivatives). This definition is designed to 
create a category of component stocks that are issued by companies that 
are not based in the U.S., but that also are not subject to oversight 
through Commission registration, and would include sponsored GDRs and 
EDRs. This definition would appear in new subsection (4) of Rule 
1000(b) and new subsection (5) of Rule 1000A(b). A ``US Component 
Stock'' would mean an equity security that is registered under Sections 
12(b) or 12(g) of the Exchange Act, which would include an equity 
security registered under Section 12(b) or 12(g) of the Exchange Act 
underlying ADRs.
    Equity securities underlying ADRs that are registered pursuant to 
the Exchange Act are considered US Component Stocks because the issuers 
of those securities are subject to Commission jurisdiction and must 
comply with Commission rules. This definition would appear in new 
subsection (3) of Rule 1000(b) and new subsection (4) of Rule 1000A(b).
    The Exchange proposes that in order to list a PDR or an IFS based 
on an international or global index pursuant to the generic standards, 
the index must meet the following criteria:
     Component stocks that in the aggregate account for at 
least 90% of the weight of the index or portfolio shall have a minimum 
worldwide market value of at least $100 million (Rule 1000, Commentary 
.03(a)(B)(1) and Rule 1000A, Commentary .02(a)(B)(1));

[[Page 61813]]

     Component stocks representing at least 90% of the weight 
of the index or portfolio shall have a minimum monthly worldwide 
trading volume during each of the last six months of at least 250,000 
shares (Rule 1000, Commentary .03(a)(B)(2) and Rule 1000A, Commentary 
.02(a)(B)(2));
     The most heavily weighted component stock may not exceed 
25% of the weight of the index or portfolio and the five most heavily 
weighted component stocks may not exceed 60% of the weight of the index 
or portfolio (Rule 1000, Commentary .03(a)(B)(3) and Rule 1000A, 
Commentary .02(a)(B)(3));
     The index or portfolio shall include a minimum of 20 
component stocks (Rule 1000, Commentary .03(a)(B)(4) and Rule 1000A, 
Commentary .02(a)(B)(4)); and
     Each U.S. Component Stock in the index or portfolio shall 
be listed on a national securities exchange and shall be an NMS Stock 
as defined in Rule 600 of Regulation NMS under the Exchange Act, and 
each Non-US Component Stock in the index or portfolio shall be listed 
on an exchange that has last-sale reporting (Rule 1000, Commentary 
.03(a)(B)(5) and Rule 1000A, Commentary .02(a)(B)(5)).
    The Exchange believes that these proposed standards are reasonable 
for international and global indexes, and, when applied in conjunction 
with the other listing requirements, will result in ETFs that are 
sufficiently broad-based in scope and not readily susceptible to 
manipulation. The Exchange also believes that the proposed standards 
will result in ETFs that are adequately diversified in weighting for 
any single security or small group of securities to significantly 
reduce concerns that trading in the ETFs based on international or 
global indexes could become a surrogate for trading in unregistered 
securities.
    The Exchange further notes that, while these standards are similar 
to those for indexes that include only U.S. Component Stocks, they 
differ in certain important respects and are generally more 
restrictive, reflecting greater concerns over diversification with 
respect to ETFs investing in components that are not individually 
registered with the Commission. First, in the proposed standards, 
component stocks that in the aggregate account for at least 90% of the 
weight of the index or portfolio shall have a minimum market value of 
at least $100 million, compared to a minimum market value of at least 
$75 million for indexes with only U.S. Component Stocks.\18\ Second, in 
the proposed standards, the most heavily weighted component stock 
cannot exceed 25% of the weight of the index or portfolio, in contrast 
to a 30% standard for an index or portfolio comprised of only U.S. 
Component Stocks. Third, in the proposed standards, the five most 
heavily weighted component stocks shall not exceed 60% of the weight of 
the index or portfolio, compared to a 65% standard for indexes 
comprised of only U.S. Component Stocks. Fourth, the minimum number of 
stocks in the proposed standards is 20, in contrast to a minimum of 13 
in the standards for an index or portfolio with only U.S. Component 
Stocks. Finally, the proposed standards require that each Non-US 
Component Stock included in the index or portfolio be listed and traded 
on an exchange that has last-sale reporting.
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    \18\ The Exchange states that ``market value'' is calculated by 
multiplying the total shares outstanding by the price per share of 
the component stock.
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    The Exchange also proposes to modify Commentary .03(b)(iii) to Rule 
1000 and Commentary .02(b)(iii) to Rule 1000A to require that the index 
value for ETFs listed pursuant to the proposed standards for 
international and global indexes be widely disseminated by one or more 
major market data vendors at least every 60 seconds during the time 
when the ETF trades on the Exchange. If the index value does not change 
during some or all of the period when trading is occurring on the 
Exchange, the last official calculated index value must remain 
available throughout Exchange trading hours. In contrast, index values 
for ETFs listed pursuant to the existing standards for domestic indexes 
must be disseminated at least every 15 seconds during the trading day. 
This modification reflects limitations, in some instances, on the 
frequency of intra-day trading information with respect to Non-US 
Component Stocks and that in many cases, trading hours for overseas 
markets overlap only in part, or not at all, with Exchange trading 
hours. In addition, Commentary .03(c) to Rule 1000 and Commentary 
.02(c) to Rule 1000A are being modified to define the term ``Indicative 
Intraday Value'' as the estimate that is updated every 15 seconds of 
the value of a share of each ETF, for ease of reference in these rules 
and also in Rules 1002 and 1002A regarding continued listing standards. 
The Exchange also proposes to clarify in Commentary .03(c) to Rule 1000 
and Commentary .02(c) to Rule 1000A that the Intraday Indicative Value 
will be updated during the hours the ETF shares trade on the Exchange 
to reflect changes in the exchange rate between the U.S. dollar and the 
currency in which any component stock is denominated.
    The Exchange is also proposing to add a subsection (i) to 
Commentary .03 to Rule 1000 and a subsection (j) to Commentary .02 to 
Rule 1000A regarding the creation and redemption process for ETFs and 
compliance with Federal securities laws for, in particular, ETFs listed 
pursuant to the generic standards for international and global indexes. 
These new subsections will apply to PDRs listed pursuant to Commentary 
.03(a)(B) or (C) and for IFSs listed pursuant to Commentary .02(a)(B) 
or (C). They will require that the statutory prospectus or the 
application for exemption from provisions of the 1940 Act for the ETF 
being listed pursuant to these new standards must state that the ETF 
must comply with the Federal securities laws in accepting securities 
for deposits and satisfying redemptions with redemption securities, 
including that the securities accepted for deposits and the securities 
used to satisfy redemption requests are sold in transactions that would 
be exempt from registration under the Securities Act of 1933.\19\
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    \19\ 15 U.S.C. 77a et seq.
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    The Exchange states that the Commission has approved generic 
standards providing for the listing pursuant to Rule 19b-4(e) \20\ of 
other derivative products based on indexes previously approved by the 
Commission under Section 19(b)(2) of the Exchange Act. The Exchange 
proposes to include in the generic standards for the listing of PDRs 
and IFSs, in new Commentary .03(a)(C) to Rule 1000 and Commentary 
.02(a)(C) to Rule 1000A, indexes that have been approved by the 
Commission as underlying benchmarks in connection with the listing of 
options, PDRs, IFSs, Index-Linked Exchangeable Notes or Index-Linked 
Securities. The Exchange believes that the application of this standard 
to ETFs is appropriate because the underlying index will have been 
subject to detailed and specific Commission review in the context of 
the approval of listing of other derivatives. For example, Section 107D 
(Index-Linked Securities) of the Amex Company Guide includes as one 
element of the standards for listing Index-Linked Exchangeable Notes 
pursuant to Rule 19b-4(e) \21\ the previous review and approval for 
trading of options or other derivatives by the Commission under Section

[[Page 61814]]

19b(2) of the Exchange Act and rules thereunder.\22\
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    \20\ 17 CFR 240.19b-4(e).
    \21\ 17 CFR 240.19b-4(e).
    \22\ See supra note 5.
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    This new generic standard will be limited to stock indexes and will 
require that each component stock be either (i) a U.S. Component Stock 
that is listed on a national securities exchange and is an NMS Stock as 
defined in Rule 600 of Regulation NMS under the Exchange Act or (ii) a 
Non-US Component Stock that is listed and traded on an exchange that 
has last-sale reporting.
    The Exchange is also proposing to include additional continued 
listing standards relating to ETFs that substitute new indexes, either 
in the instance where the value of the index or portfolio of securities 
on which the ETF is based is no longer calculated or available, or in 
the event that the ETF chooses to substitute a new index or portfolio 
for the existing index or portfolio. In both instances, the Exchange 
would commence delisting proceedings if the new index or portfolio does 
not meet the requirements of and listing standards set forth in Rules 
1000 et seq. or Rules 1000A et seq., as applicable. If, for example, an 
ETF chose to substitute an index that did not meet any of the generic 
listing standards for listing of ETFs pursuant to Rule 19b-4(e),\23\ 
then for continued listing, approval by the Commission of a separate 
filing pursuant to Section 19(b)(2) \24\ to list and trade that ETF 
would be required.
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    \23\ 17 CFR 240.19b-4(e).
    \24\ 15 U.S.C. 78s(b)(2).
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    The Exchange proposes to modify the initial and continued listing 
standards relating to disseminated information to formalize in the 
rules existing best practices for providing equal access to material 
information about the value of ETFs. Pursuant to Rules 1002(a)(ii) and 
1002A(a)(ii), prior to approving an ETF for listing, the Exchange will 
obtain a representation from the ETF issuer that the net asset value 
per share will be calculated daily and made available to all market 
participants at the same time. Proposed Rules 1002(b)(ii) and 
1002A(b)(ii) set out the trading halt parameters for ETFs. In 
particular, the proposed rules specifically set out that if the 
Intraday Indicative Value (as defined in Commentary .03 to Rule 1000 
and Commentary .02 to Rule 1000A) or the index value applicable to that 
series of ETFs is not being disseminated as required, the Exchange may 
halt trading during the day in which the interruption to the 
dissemination of the Intraday Indicative Value or the index value 
occurs. If the interruption to the dissemination of the Intraday 
Indicative Value or the index value persists past the trading day in 
which it occurred, the Exchange will halt trading no later than the 
beginning of the trading day following the interruption.
    The Exchange is proposing other minor and clarifying changes to 
Rules 1000, 1002, 1000A and 1002A. The standards set out in Commentary 
.03(a)(A) to Rule 1000 and Commentary .02(a)(A) to Rule 1000A are being 
modified to make the wording of each requirement consistent; in 
addition, standard (5) has been modified to reflect the adoption of 
Regulation NMS.\25\ Proposed Commentary .03(b)(iv) to Rule 1000 and 
Commentary .02(b)(iv) to Rule 1000A have been added reflect make sure 
that entities that advise index providers or calculators and related 
entities have in place procedures designed to prevent the use and 
dissemination of material non-public information regarding the index 
underlying the ETF.
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    \25\ 17 CFR 242.600 et seq. See also Securities Exchange Act 
Release No. 51808 (June 9, 2005), 70 FR 37496 (June 29, 2005) 
(``Regulation NMS Approval Order'').
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2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6 of the Exchange Act,\26\ in general, and 
furthers the objectives of Section 6(b)(5) of the Exchange Act,\27\ 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, and, in general, to protect 
investors and the public interest.
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    \26\ 15 U.S.C. 78f(b).
    \27\ 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.

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 Amex 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.
    The Commission is considering granting accelerated approval of the 
proposed rule change, as amended, at the end of a 15-day comment 
period.\28\
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    \28\ Amex has requested accelerated approval of this proposed 
rule change, as amended, prior to the 30th day after the date of 
publication of the notice of the filing thereof, following the 
conclusion of a 15-day comment period.
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Exchange 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-2006-78 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-2006-78. 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

[[Page 61815]]

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 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-2006-78 and should be submitted on or before November 3, 2006.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\29\
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    \29\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E6-17396 Filed 10-18-06; 8:45 am]

BILLING CODE 8011-01-P