Document ID: SEC-2006-0954-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2006-07-27T04:00Z

[Federal Register: July 27, 2006 (Volume 71, Number 144)]
[Notices]               
[Page 42689-42690]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jy06-86]                         

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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-54183; File No. SR-Amex-2006-68]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Applying the Allocation Algorithm in Rule 935(a)(4)--ANTE to 
Supplemental Registered Options Traders

July 20, 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 July 13, 2006, the American Stock Exchange LLC (``Amex'' or 
``Exchange'') submitted to the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been substantially prepared by Amex. The 
Exchange filed the proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders it 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)(iii).
    \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 seeks to apply the allocation algorithm in Amex Rule 
935(a)(4)--ANTE to a Supplemental Registered Options Trader (``SROT'') 
interacting with its own firm's orders. 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. 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
    On March 14, 2006, the Exchange submitted a proposal to amend Amex 
Rule 935--ANTE to revise the manner in which executed contracts are 
allocated when more than one market participant is either quoting, or 
has orders, at the Amex best bid or offer at the time the execution 
occurs. However, by the time this filing was approved on May 12, 
2006,\5\ other changes to Amex Rule 935--ANTE were approved.\6\
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    \5\ See Securities Exchange Act Release No. 53798 (May 12, 
2006), 71 FR 29193 (May 19, 2006) (SR-Amex-2006-25).
    \6\ See Securities Exchange Act Release Nos. 53635 (April 12, 
2006), 71 FR 20144 (April 19, 2006) (SR-Amex-2005-075) (establishing 
a new class of registered options trader called an SROT) and 53652 
(April 13, 2006), 71 FR 20422 (April 20, 2006) (SR-Amex-2005-100) 
(establishing a new class of registered options trader called a 
Remote Registered Options Trader (``RROT'')).
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    The Exchange seeks to apply the allocation algorithm set forth in 
Amex Rule 935--ANTE to an SROT interacting with its own firm's orders. 
The Exchange proposes that after non-broker dealer customer orders are 
executed, the ANTE system would allocate to SROTs the greater of either 
40% of the contracts, or the amount the SROT would be entitled to 
receive pursuant to the allocation algorithm set forth in Amex Rule 
935(a)(4)--ANTE. The balance of the contracts would be allocated to the 
specialist, registered options traders, RROTs, or other SROTs, pursuant 
to Amex Rule 935(a)(4)--ANTE.
    If the SROT receives contracts pursuant to proposed paragraph 
(a)(7)(i) of Amex Rule 935--ANTE, then the specialist, registered 
options trader, RROT, or any other SROT would receive contracts 
pursuant to the allocation algorithm in Amex Rule 935(a)(4)--ANTE. In 
particular, whenever an SROT interacts with its own firm's orders, the 
specialist would not be entitled to the specialist guarantee set forth 
in Amex Rule 935(a)(5)--ANTE.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\7\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\8\ 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 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 not designed to permit unfair discrimination between customers, 
issuers, brokers, or dealers.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change will impose no 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

[[Page 42690]]

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received by the 
Exchange on this proposal.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and subparagraph (f)(6) of Rule 19b-4 
\10\ thereunder because it does not: (i) Significantly affect the 
protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) become operative for 30 
days from the date on which it was filed, or such shorter time as the 
Commission may designate; and the Exchange has given the Commission 
written notice of its intention to file the proposed rule change at 
least five business days prior to filing. 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
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    Under Rule 19b-4(f)(6) of the Act,\11\ the proposal does not become 
operative for 30 days after the date of its filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest. Amex has requested that the 
Commission waive the five-day pre-filing requirement \12\ and the 30-
day operative delay to allow for the expeditious and accurate 
publication of the rule change. The Commission believes that because 
the proposal would extend the current allocation algorithm to the 
Exchange's new class of market participants, SROTs, the proposal raises 
no new regulatory concerns. Therefore, the Commission, consistent with 
the protection of investors and the public interest, has determined to 
waive the five-day pre-filing requirement and the 30-day operative date 
so that the proposal may take effect upon filing.\13\
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    \11\ Id.
    \12\ Amex provided the Commission with written notice of its 
intent to file the proposed rule change three days prior to the 
filing date.
    \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. 15 U.S.C. 78c(f).
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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 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-2006-68 on the subject line.

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-2006-68. 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 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-2006-68 and should be submitted on or before August 
17, 2006.

    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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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-11988 Filed 7-26-06; 8:45 am]

BILLING CODE 8010-01-P