Document ID: SEC-2006-1080-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-08-23T04:00Z

[Federal Register: August 23, 2006 (Volume 71, Number 163)]
[Notices]               
[Page 49492]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23au06-114]                         

=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54327; File No. SR-Amex-2006-47]

 
 Self-Regulatory Organizations; American Stock Exchange LLC; 
Order Approving Proposed Rule Change and Amendment No. 2 Thereto 
Relating to the Member Firm Guarantee for FLEX Equity Options

August 16, 2006.
    On May 12, 2006, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') a proposed rule change pursuant to Section 19(b)(1) of 
the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ to amend Amex Rule 904G(e)(iii) to increase the member 
firm guarantee for FLEX equity options from 25% to 40%.\3\ The Amex 
filed Amendment No. 1 to the proposed rule change on June 5, 2006 and 
subsequently withdrew Amendment No. 1. The Amex filed Amendment No. 2 
to the proposed rule change on June 12, 2006. The proposed rule change, 
as amended, was published for comment in the Federal Register on July 
12, 2006.\4\ The Commission received no comments on the proposal. This 
order approves the proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ A ``member firm guarantee'' provides, under certain 
conditions, a member firm with the ability to cross a specified 
percentage of a customer order with its own proprietary order before 
specialists and/or registered options traders in the trading crowd 
can participate in the transaction.
    \4\ See Securities Exchange Act Release No. 54104 (July 5, 
2006), 71 FR 39374.
---------------------------------------------------------------------------

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of Section 6(b) of the 
Act \5\ and the rules and regulations thereunder applicable to a 
national securities exchange,\6\ and in particular with Section 6(b)(5) 
of the Act.\7\ The Commission notes that under the proposal the member 
firm guarantee for FLEX equity options could not exceed 40% of an 
order. The Commission has found with respect to participation 
guarantees in other contexts that a maximum guarantee of 40% is not 
inconsistent with statutory standards of competition and free and open 
markets.\8\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. See 15 U.S.C. 78c(f).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ See Securities Exchange Act Release No. 42455 (February 24, 
2000), 65 FR 11388 (March 2, 2000). See also Securities Exchange Act 
Release No. 51275 (February 28, 2005), 70 FR 10709 (March 4, 2005) 
(File No. SR-Amex-2005-002).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-Amex-2006-47), as amended, is 
hereby approved.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Nancy M. Morris,
Secretary.
 [FR Doc. E6-13932 Filed 8-22-06; 8:45 am]

BILLING CODE 8010-01-P