[Federal Register Volume 59, Number 143 (Wednesday, July 27, 1994)] [Unknown Section] [Page 0] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 94-18253] [[Page Unknown]] [Federal Register: July 27, 1994] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Release No. 34-34416; File No. SR-Amex-94-15] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the New York Exchange, Inc., Relating to Amendments to Rule 205 (Odd-Lot Orders). July 21, 1994. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on May 12, 1994, the American Stock Exchange, Inc. (``Amex'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II and III below, which Items have been prepared by the self-regulatory organization. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Amex proposes to amend Rule 205 (Manner of Executing Odd-Lot Orders) (1) to provide that no differential shall be charged on odd-lot order transactions (except for non-regular way trades); (2) to revise provisions relating to the price at which certain odd-lot limit orders shall be executed, and (3) to delete, reposition or re-number various provisions relating to specific types of odd-lot orders. The text of the proposed rule change is available at the Office of the Secretary, the Amex and at the Commission. 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 IV below. The self-regulatory organization has prepared summaries, set forth in Section 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 The Exchange proposes to amend Rule 205 relating to the execution of odd-lot orders (1) to eliminate the odd-lot differential for market and limit orders; (2) amend provisions relating to the price at which odd-lot limit orders are executed; and (3) delete, reposition or re- number various provisions relating to specific types of odd-lot orders in Rule 205, Section B. Under current Exchange rules, market odd-lot orders to buy or sell, as well as marketable limit orders, are executed with no differential charged.\1\ However, a differential may be charged in connection with executions of odd-lot limit orders, market orders to sell marked ``short,'' stop orders, and other types of orders (e.g., orders to buy or sell ``at the close''). In order to enhance the competitiveness of Exchange odd-lot execution procedures, the Exchange has determined to require the execution of all odd-lot market or limit orders (except for non-regular way executions under proposed Section C(2) of the rule) without a differential. --------------------------------------------------------------------------- \1\Procedures for executing odd-lot market orders are currently being implemented on a pilot basis, extended until August 8, 1994. See Securities Exchange Act Release No. 33584 (February 7, 1994), 59 FR 6983 (February 14, 1994). --------------------------------------------------------------------------- Rule 205, Section A(2) would require that limited orders to buy (sell) be executed at the price of the first round lot transaction which is at or below (above) the specified limit price (the ``effective transaction'' price). Sell limited orders marked ``short'' would be executed at the price of the first round lot transaction which is at or above the specified limit and which is also higher than the last different round lot transaction price (a ``plus'' or ``zero-plus'' tick). Marketable limit orders would continue to be executed in accordance with procedures applicable to market orders. Provisions relating to orders that are infrequently or never entered (i.e., limited orders to buy an offer, sell on bid, ``immediate or cancel''; buy or sell marked ``or on close'') would be deleted. Provisions relating to ``seller's option'' or cash trades in Section C would be deleted and subsumed by new Section C(2) (Non-Regular Way Trades). A differential could be charged on such executions. 2. Statutory Basis The proposed rule change will advance the objectives of Section 6(b) of the Act in general and furthers the objectives of Section 6(b)(5) 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, and in general, to protect investors and the public interest. 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. 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 written comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) by order approved the proposed rule change, or (B) institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views and arguments concerning the foregoing. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street NW., Washington, D.C. 20549. 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 maybe withheld from the public in accordance with the provisions of 5 U.S.C. Sec. 552, will be available for inspection and copying at the commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such filing will also be available for inspection and copying at the principal office of the Amex. All submissions should refer to File No. SR-Amex-94-15 and should be submitted by August 17, 1994. For the Commission, by the Division of Market Regulation, pursuant to delegated authority. Margaret H. McFarland Deputy Secretary. [FR Doc. 94-18253 Filed 7-26-94; 8:45 am] BILLING CODE 8010-01-M