Document ID: SEC-2005-0235-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2005-11-14T05:00Z

[Federal Register: November 14, 2005 (Volume 70, Number 218)]
[Notices]               
[Page 69170-69171]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14no05-74]                         

[[Page 69170]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52740; File No. SR-Amex-2005-109]

 
Self-Regulatory Organizations; American Stock Exchange, LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Revising the Implementation Date for the ANTE System and Increased 
Floor Broker Functionality in the ANTE System

November 4, 2005.
    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 October 27, 2005, 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 Amex. Amex has filed the 
proposed rule change 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

    Amex proposes to amend (1) Rule 900--ANTE to provide a revised date 
for the completion of the implementation of the ANTE System to all 
option classes; and (2) Rule 935--ANTE, Commentary .01 to establish a 
revised date for increased floor broker functionality in the ANTE 
System. The text of the proposed rule change is available on Amex's Web 
site (http://www.amex.com), at Amex's Office of the Secretary, and at 

the Commission's Public Reference Room.

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. 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
Revised Implementation Date--Rule 900--ANTE
    On May 20, 2004, the Commission approved the Amex's proposal to 
implement a new options trading platform known as the Amex New Trading 
Environment (``ANTE''). On May 25, 2004, the Amex began rolling out the 
ANTE System on its trading floor on a specialist's post-by-specialist's 
post basis. At that time it was anticipated the roll-out would be 
completed by the end of the second quarter of 2005. The implementation 
date for the full roll-out of the ANTE System was extended to October 
31, 2005.\5\ The Amex has rolled out the ANTE System to all its option 
classes except two--the Nasdaq 100 Index (``NDX'') and the Mini Nasdaq 
Index (``MNX''). There are specific reasons why these products have not 
been rolled out on the ANTE System. The specialist in these products is 
concerned that the theoretical price calculator provided by the ANTE 
System may not accurately price the options on these indexes. The 
specialist is currently waiting for his own theoretical index price 
calculator, which has been installed and is currently being tested, to 
successfully calculate prices for these indexes and the options. It is 
expected that the MNX/NDX specialist will have its proprietary 
calculator in place by November 30, 2005.
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    \5\ See Securities Exchange Act Release No. 52504 (September 23, 
2005) 70 FR 57632 (October 3, 2005).
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    The Amex is now proposing to further revise its implementation 
schedule to provide that the remaining two option classes will be on 
the ANTE System by November 30, 2005. Maintaining two systems for the 
trading of options--the legacy system (XTOPS, AODB and Auto-Ex) and 
ANTE--is costly. As a result the Exchange is working diligently to have 
all option classes on the ANTE System by November 30, 2005 so that it 
can retire its legacy systems.
Increased Floor Broker Functionality--Rule 935--ANTE
    Amex Rule 935--ANTE (b) provides for the post trade allocation of 
contracts executed as the result of the submission of orders to trade 
with orders in the ANTE Central Book. If more than one ANTE Participant 
\6\ and/or a floor broker representing a customer order submits an 
order to trade with an order in the ANTE Central book within a period 
not to exceed five seconds after the initial ANTE Participant has 
submitted its order, all those ANTE Participants and the floor broker's 
customer will be entitled to participate in the allocation of any 
executed contracts. The ANTE System is currently unable to provide the 
functionality necessary for floor brokers representing customer orders 
in the trading crowd to directly participate in the post trade 
allocation of orders taken off the Central Book. Commentary .01 to Amex 
Rule 935--ANTE provides a temporary methodology for the specialist to 
disengage the post trade allocation system in a specific series, which 
allows the floor broker to alert the specialist within the five second 
timeframe whenever his customer wants to participate in post trade 
allocation, and allows the specialist to provide for the customer's 
participation in post trade allocation when appropriate. The Commission 
approved the procedures set forth in Commentary .01 as a ``reasonable, 
temporary solution'' \7\. Commentary .01 to Amex Rule 935--ANTE also 
provides that the ANTE System will give floor brokers greater 
functionality accessing the Central Book on March 31, 2005, or such 
other date as established by the Exchange and submitted to the 
Commission pursuant to Section 19(b) of the Act. The Exchange 
subsequently established October 31, 2005, as the date the increased 
functionality would be available in the ANTE System. Due to a delay in 
the roll out of the increased floor broker functionality, the Exchange 
now proposes to establish November 30, 2005, as the date set forth in 
Commentary .01 to Amex Rule 935--ANTE for such increased functionality.
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    \6\ Amex Rule 900--ANTE (b)(45) defines an ANTE Participant as 
either the specialist and/or registered options trader(s) assigned 
to trade a specific options class on the ANTE System.
    \7\ See Securities Exchange Act Release No. 49747 (May 20, 2004) 
69 FR 30344 (May 27, 2004).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \8\ in general and furthers the objectives 
of Section 6(b)(5) of the Act \9\ in particular in that it is designed 
to prevent fraudulent and manipulative acts and practices and to 
promote just and equitable principles of trade, to foster cooperation 
and

[[Page 69171]]

coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to and facilitating transactions in 
securities, 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; and is designed to prohibit 
unfair discrimination between customers, issuers, brokers and dealers.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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

    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 Exchange has designated the proposed rule change as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A)(iii) of the 
Act \10\ and subparagraph (f)(6) thereunder.\11\ Amex represents that 
the proposed rule change: (1) Does not significantly affect the 
protection of investors or the public interest; (2) does not impose any 
significant burden on competition; and (3) does not become operative 
for thirty days from the date on which it was filed, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \12\ normally 
does not become operative prior to thirty days after the date of 
filing. The Exchange has requested that the Commission waive the five-
day pre-filing requirement and the 30-day operative delay, as specified 
in Rule 19b-4(f)(6)(iii), and designate the proposed rule change to 
become operative upon filing.
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    \12\ Id.
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    The Commission hereby grants the request.\13\ The Commission notes 
that Amex has represented that the theoretical price calculators for 
the final two options classes are not installed and/or functioning 
properly and that it has not yet implemented the functionality for 
floor brokers customer orders. The Commission believes that extending 
the deadline for implementing Amex Rules 900--ANTE and 935--ANTE by a 
month should afford Amex the time needed to install and test the 
theoretical price calculators and to implement the floor broker 
customer order functionality. For these reasons, the Commission 
designates the proposed rule change as effective and operative 
immediately.
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    \13\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of the proposed rule 
change the Commission may summarily abrogate such proposed 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-2005-109 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-Amex-2005-109. 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-2005-109 and should be submitted on or before 
December 5, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
 [FR Doc. E5-6250 Filed 11-10-05; 8:45 am]

BILLING CODE 8010-01-P