Document ID: SEC-2007-0767-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC
Posted Date: 2007-06-04T04:00Z

[Federal Register: June 4, 2007 (Volume 72, Number 106)]
[Notices]               
[Page 30891-30893]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04jn07-105]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58824; File No. SR-Amex-2007-52]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Floor Broker Zone Requirements in AEMI

 May 29, 2007.
     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 May 24, 2007, 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 substantially prepared by Amex. The 
Exchange filed the proposed rule change as a ``non-controversial'' rule 
change

[[Page 30892]]

under Rule 19b-4(f)(6) under the Act,\3\ 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\ 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

    The Exchange proposes to adopt a specific zone (each a ``Zone'' or 
collectively, the ``Zones'') requirement for floor brokers in equities 
and ETFs on the trading floor. The text of the proposed rule change is 
available on Exchange's Web site (http://www.amex.com), at Amex's 

principal office, 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, Proposed Rule Change

1. Purpose
    The Exchange proposes to amend the AEMI Rules \4\ to require a 
floor broker to be located within the same Zone when submitting a Crowd 
Order in that Zone.\5\ A floor broker may trade in any crowd on the 
floor of the Exchange, but, pursuant to existing Rule 1A--AEMI, must be 
physically present in the crowd to represent a Crowd Order in the AEMI 
Book.\6\ Furthermore, upon leaving a crowd or logging out of his 
system, a floor broker must either: (i) Cancel all crowd orders in the 
AEMI Book for securities in the crowd he is leaving, (ii) 
electronically submit the orders in the form of percentage or limit 
order to the Specialist for handling, or (iii) electronically route the 
crowd order to another floor broker in the crowd, via his hand held 
terminal.\7\
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    \4\ See Securities Exchange Act Release No. 54552 (September 29, 
2006), 71 FR 59546 (October 10, 2006) (order approving SR-Amex-2005-
104) (``AEMI Approval Order''); see also Securities Exchange Act 
Release No. 54709 (November 3, 2006), 71 FR 65847 (November 9, 2006) 
(order approving SR-Amex-2006-72).
    \5\ A Crowd Order is defined in Rule 1A--AEMI as an order in the 
AEMI Book that is represented by: (1) A broker standing in the crowd 
or (2) a bid or offer in the AEMI Book entered by a Registered 
Trader standing in the crowd.
    \6\ The ``AEMI Book'' is the part of the AEMI platform that 
holds and automatically matches orders, bids, and offers submitted 
to it electronically by specialists, Registered Traders, Floor 
Brokers, and off-Floor members in accordance with these rules.
    \7\ See AEMI Approval Order, 71 FR at 59551.
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    The Exchange proposes, in Rule 1A--AEMI, to establish three trading 
Zones to reflect the specific identifiable areas on the trading floor 
where floor brokers are able to conduct business at each post/panel 
within the Zone. A floor broker will be considered to be in the Zone if 
he or she is physically present in the area set forth as part of that 
Zone. The Exchange believes that designating specific Zones on the 
trading floor will serve to distinguish the areas that benefit the 
interaction among the members on the trading floor. The Exchange 
proposes to require that a floor broker submitting a Crowd Order must 
be within the same Zone as where he is submitting the Crowd Order.
    As noted above, a floor broker, upon leaving a crowd or logging out 
of his system, must either: (i) Cancel all crowd orders in the AEMI 
Book for securities in the crowd he is leaving, (ii) electronically 
submit the orders in the form of percentage or limit order to the 
Specialist for handling, or (iii) electronically route the crowd order 
to another floor broker in the crowd, via his hand held terminal.\8\ 
The Exchange however, proposes two exceptions to the Zone requirement. 
First, a floor broker may leave a Zone to obtain ``market looks'' in 
securities located at panels that are part of another Zone.\9\ Second, 
a floor broker may leave the Zone for the time necessary to change its 
hand held batteries without having to cancel all Crowd Orders, 
electronically submit orders to the Specialist for handling, or 
electronically route the Crowd Order to another floor broker in the 
Zone.
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    \8\ Id.
    \9\ ``Market looks'' are quick snapshots of trading interest 
that brokers convey back to their customers.
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    AEMI securities are traded on the Main Trading Floor, the 
Mezzanine, and the ground floor of the Exchange, which is called 
Harry's. In this regard, the Exchange proposes to designate Zones in 
only those three areas of the Trading Floor. The Main Trading Floor 
shall be designated as Zone A, the Mezzanine as Zone B, and Harry's as 
Zone C.
    The Exchange intends to disseminate to its members an information 
circular identifying the specific areas comprising each Zone.
2. Statutory Basis
    The proposed rule change is consistent with 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, promote just and equitable principles 
of trade, remove impediments to and perfect the mechanisms of a free 
and open market and a national market system, and, in general, protect 
investors and the public interest.
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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 proposed rule change does 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

    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

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) by its terms, 
does not become operative for 30 days after the date of filing, the 
proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \12\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\13\ As required under Rule 19b-4(f)(6)(iii),\14\ the 
Exchange provided the Commission with written notice of its intent to 
file the proposed rule change, along with a brief description and text 
of the proposed rule change, at least five business days prior to the 
date of the filing of the proposed rule change.
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ 17 CFR 240.19b-4(f)(6)(iii).
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    Amex has requested that the Commission waive the 30-day operative 
delay. The Commission believes that waiving the 30-day operative delay 
is consistent with the protection of investors and the public 
interest.\15\ The

[[Page 30893]]

Commission notes that the proposed rule change is modeled on NYSE Rules 
70.20 and 70.30, which previously have been subject to a public notice 
period.\16\ Amex's proposal does not appear to raise any novel 
regulatory issues and will allow Amex without undue delay to define 
what it means for a floor broker to be physically present in a crowd 
and thus permitted to represent a Crowd Order in the AEMI Book.
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    \15\ 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).
    \16\ See Securities Exchange Act Release Nos. 54427 (September 
12, 2006), 71 FR 54862 (September 19, 2006) (SR-NYSE-2006-58); and 
55316 (February 20, 2007), 72 FR 8825 (February 27, 2007) (SR-NYSE-
2007-14).
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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 the 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-2007-52 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-2007-52. 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 Section. Copies of such 
filing also will be available for inspection and copying at the 
principal office of 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-2007-52 and should be submitted on or before June 25, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\17\
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    \17\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-10680 Filed 6-1-07; 8:45 am]

BILLING CODE 8010-01-P