Document ID: SEC-2005-0447-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2005-12-27T05:00Z

[Federal Register: December 27, 2005 (Volume 70, Number 247)]
[Notices]
[Page 76472-76474]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de05-69]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52984; File No. SR-Amex-2005-123]

Self-Regulatory Organizations; American Stock Exchange LLC;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Amend Amex Rule 900-ANTE to Provide a Revised Implementation Date for
the ANTE System, and To Eliminate Commentary .01 to Amex Rule 935-ANTE

December 20, 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 November 29, 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 the Amex. The Amex filed
the proposal as a ``non-controversial'' 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.\5\ 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).
    \5\ The Amex has asked the Commission to waive the five-day pre-
filing notice requirement and the 30-day operative delay. See Rule
19b-4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change

    The Amex proposes to amend (i) Amex Rule 900-ANTE to provide a
revised date for the completion of the implementation of the ANTE
System for all options classes; and (ii) Amex Rule 935-ANTE, to
eliminate Commentary .01 because the implementation of increased floor
broker functionality in the ANTE System has made this provision
obsolete. The text of the proposed rule change is available on the
Amex's Web site (http://www.amex.com), at the Amex's Office of the

Secretary, and at the Commission's Public Reference Room.

[[Page 76473]]

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 proposal. 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--Revised Implementation Date--Amex 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'').\6\ 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, the Amex anticipated that the
roll out would be completed by the end of the second quarter of 2005.
The Amex subsequently extended the implementation date for the full
roll-out of the ANTE System to November 30, 2005.\7\ 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
waiting for its own theoretical index price calculator, which has been
installed and is currently being tested, to successfully calculate
prices for these indexes and options. The Amex expects that the MNX/NDX
specialist will have the proprietary calculator in place by December
31, 2005.
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    \6\ See Securities Exchange Act Release No. 49747 (May 20,
2004), 69 FR 30344 (May 27, 2004) (SR-Amex-2003-89).
    \7\ See Securities Exchange Act Release No. 52740 (November 4,
2005), 70 FR 69170 (November 14, 2005), (SR-Amex-2005-109).
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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 December 31, 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 December 31, 2005, so
that it can retire its legacy systems.
Increased Floor Broker Functionality--Amex 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
\8\ 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 was initially 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 trading allocation system in a specific series,
which allows the floor broker to alert the specialist within the five-
second timeframe whenever the specialist's 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 to Amex Rule 935-ANTE as a ``reasonable, temporary
solution.'' \9\ Effective November 18, 2005, the ANTE System gave floor
brokers greater functionality to access the Central Book, and the
Exchange now proposes to eliminate Commentary .01 because the
implementation of greater floor broker functionality has made the
procedures set forth in Commentary .01 unnecessary.
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    \8\ Amex Rule 900-ANTE (b)(45) defines ANTE Participant as the
specialist and/or registered options trader(s) assigned to trade a
specific options class on the ANTE System.
    \9\ See footnote 6, supra.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent
with the requirements of section 6(b) of the Act \10\ in general, and
furthers the objectives of section 6(b)(5) of the Act \11\ 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 designed to prohibit
unfair discrimination between customers, issuers, brokers and dealers.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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 not 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 has neither solicited nor received comments on the
proposed rule change.

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

    Because the foregoing 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) by its terms does not become operative for 30 days after the
date of this filing, or such shorter time as the Commission may
designate if consistent with the protection of investors and the public
interest, the proposed rule change has become effective pursuant to
section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder. The
Exchange has requested that the Commission waive the five-day pre-
filing requirement and the 30-day operative delay period for ``non-
controversial'' proposals.
    The Commission waives the five-day pre-filing requirement and the
30-day operative delay.\12\ The Amex has represented that the
theoretical price calculators for the final two options classes are not
installed. The Commission believes that extending the deadline for
implementing Amex Rule

[[Page 76474]]

900-ANTE by one month should afford the Amex the time needed to install
and/or fix the theoretical price calculators. The Commission believes
that it is in the interest of investors and the public to delay
implementation of the ANTE system until all of the components are in
place and functioning properly, and to eliminate Commentary .01 to Amex
Rule 935, which it is no longer necessary. Therefore, the foregoing
rule change has become immediately effective and operative upon filing
pursuant to Section 19(b)(3)(A)(iii) of the Act \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \12\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
    \13\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \14\ 17 CFR 240.19b-4(f)(6).
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    At any time within 60-days of the filing of the 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.

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-2005-123 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-2005-123. 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 Amex's
Office of the Secretary. 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-2005-123 and should be submitted on or before January 17, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-7843 Filed 12-23-05; 8:45 am]

BILLING CODE 8010-01-P