Document ID: SEC-2008-0245-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: American Stock Exchange LLC
Posted Date: 2008-02-14T05:00Z

[Federal Register: February 14, 2008 (Volume 73, Number 31)]
[Notices]               
[Page 8722-8723]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14fe08-104]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57296; File No. SR-Amex-2008-08]

 
Self-Regulatory Organizations; American Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change 
to Eliminate Percentage Orders and Passive Price Improving Orders on 
the AEMI Platform

February 8, 2008.
    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 February 6, 2008, 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 substantially by the Amex. The 
Amex has submitted the proposed rule change under 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

    The Amex proposes to revise its rules to eliminate percentage 
orders and passive price improvement (``PPI'') orders as valid order 
types for securities traded on the Amex's AEMI platform. According to 
the Amex, neither order type is currently being used.
    The text of the proposed rule change is available at http://
www.amex.com, the principal office of the Amex, and 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, the 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 III below. The 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
    In March 2007, the Commission approved PPI orders as a valid order 
type on AEMI.\5\ According to the Amex, PPI orders were designed to 
encourage specialists and Registered Traders to provide inbound 
aggressing orders with increased opportunities for price improvement. 
PPI orders would provide undisplayed liquidity on the AEMI Book and 
would react to aggressing orders according to criteria met at the time 
of order entry. The Amex states that it never implemented PPI orders 
and, therefore, that PPI orders are not being used currently by Amex 
market participants. The Amex now proposes to eliminate PPI orders from 
the AEMI rules.
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    \5\ See Securities Exchange Act Release No. 55464 (March 13, 
2007), 72 FR 13146 (March 20, 2007) (order approving File No. SR-
Amex-2007-08).
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    The percentage order is another valid order type under the Amex's 
AEMI rules that, according to the Amex, is not in use currently. The 
Amex states that on November 30, 2006, it issued Amex Notice 2006-60, 
``Disablement of Percentage Orders in AEMI,'' which prohibited the 
entry of percentage orders for securities that had migrated from the 
Amex's legacy systems onto the AEMI platform. That prohibition, which 
the Amex originally expected to be temporary, has remained in effect. 
The Amex notes, further, that percentage orders, which involve 
discretionary action by the specialist, inherently require the 
specialist to act in an agency capacity for the order. Because the Amex 
intends to move toward a specialist model that deemphasizes the broker 
role, the Amex proposes to eliminate percentage orders from the AEMI 
rules.
    The Amex therefore proposes to delete the definitions of percentage 
order and PPI order from Rule 131-AEMI, ``Types of Orders,'' and all 
cross-references to such orders in other AEMI rules. In addition, the 
Amex proposes to delete from Rule 1A-AEMI, ``Applicability, 
Definitions, References, and Phase-In,'' the definitions of Automatic 
Conversion, Manual Conversion, Active Manual Conversion, and Passive 
Manual Conversion, all of which relate only to percentage orders. The 
Amex also proposes to delete the detailed requirements for percentage 
order conversions in paragraph (j) of Rule 154-AEMI, ``Orders in 
AEMI.''
2. Statutory Basis
    The Amex believes that the proposed rule change is consistent with 
Regulation NMS,\6\ as well as 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 remove impediments to and perfect the mechanism 
of a free and open market and a national market system, and, in

[[Page 8723]]

general, to protect investors and the public interest.
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    \6\ 17 CFR 242.600 et seq.
    \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 Amex believes that 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

    The Amex has designated the proposed rule change as one that: (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 30 days from the date of filing, 
or such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest. Therefore, the 
proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder.\10\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii) 
requires the Amex to provide the Commission with written notice of 
its intention to file the proposed rule change, along with a brief 
description of the text of the proposed rule change, at least five 
business days prior to filing the proposal with the Commission, or 
such shorter time as designated by the Commission. The Commission 
has determined to waive the five-day period in this case.
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    The Amex has requested that the Commission waive the 30-day 
operative delay. The Commission hereby grants the Amex's request.\11\ 
As discussed above, neither percentage orders nor PPI orders are 
currently in use on AEMI. Accordingly, the Commission believes that 
waiving the 30-day operative delay is consistent with the protection of 
investors and the public interest because doing so will enable the 
Amex's rules to immediately reflect the actual operation of AEMI and 
the order types available on AEMI.
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    \11\ For purposes of waiving the 30-day operative delay, the 
Commission has considered the proposal'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 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-2008-08 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-2008-08. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. 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 publicly available. All 
submissions should refer to File Number SR-Amex-2008-08 and should be 
submitted on or before March 6, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-2733 Filed 2-13-08; 8:45 am]

BILLING CODE 8011-01-P