[Federal Register Volume 62, Number 240 (Monday, December 15, 1997)]
[Notices]
[Pages 65727-65728]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32650]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39411; File No. SR-Amex-97-40]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the American Stock Exchange, Inc. Relating to Proposed
Revisions to the Exchange's Policy Regarding the Use of Wireless Data
Communications Devices
December 8, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on October
29, 1997, 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 Exchange is proposing to amend its policy regarding the use of
wireless data communications devices on the trading floor. 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 self-regulatory organization
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 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
The Exchange has undertaken to build an infrastructure
(``Infrastructure'') to support wireless data communications on the
Trading Floor by members and Exchange staff. On September 26, 1996, the
Commission approved various rule changes and a policy regarding the use
of wireless data communications devices on the Trading Floor (the
``Wireless Communications Policy'').
The Exchange developed the Wireless Communications Policy based
upon a design for the Infrastructure that called for all wireless data
transmissions to pass through a gateway (``Gateway''). This would have
permitted the Exchange to make a record of all wireless communications
and to unilaterally ``throttle'' all, or selected, member
communications in the event that such transmissions used a
disproportionate amount of the available radio frequency or threatened
to exceed available radio frequency capacity.
In late 1996, the Exchange reviewed the design of the
Infrastructure. During this review, the Exchange determined that there
was no immediate need for throttling and that it was unclear when it
might become necessary. The Exchange concluded that since there was no
need for throttling, there was no need for a Gateway and that, if and
when necessary, throttling could be accomplished by the member firms
without a Gateway. As a result of this review, the Exchange determined
that since the Gateway was unnecessary, costly for both the Exchange
and its members, and difficult to develop and implement, the Exchange
would build the Infrastructure without a Gateway. The Exchange,
accordingly, is now proposing to modify the Wireless Communications
Policy to reflect the redesign of the Infrastructure to eliminate the
Gateway.
As noted above, the Gateway would have permitted the Exchange to
record all wireless communications. This would have created a data base
at the Exchange that would have largely duplicated records already
maintained by member firms pursuant to SEC and Exchange rules. The
elimination of the Gateway will eliminate this duplicative data base.
The revised Wireless Communications Policy, accordingly, will state
that members that have developed wireless technology will be
responsible for maintaining such records as may be required by Exchange
[[Page 65728]]
rules and policies and federal securities laws as in effect from time
to time. The elimination of the record keeping capabilities of the
Gateway will not cause any diminution of the Exchange's surveillance
capabilities as the Exchange will retain the same access to member
books and records that it currently possesses.
With respect to ``throttling,'' the Revised Wireless Communications
Policy states that the Exchange's staff may request members to reduce
radio traffic if and when required because a particular user is using
more than its fair share of radio frequency capacity or overall usage
in reaching its maximum. Members will be obligated to comply
immediately with any such request and their ability to send wireless
communications may be immediately terminated if they fail to comply
with such a directive. The Exchange also proposes some further changes
to the Wireless Communications Policy to enhance it in light of the
Exchange's experience with wireless technology since the Policy was
first adopted. These proposed changes include a requirement that
members using wireless technology maintain a record of orders and
quotes initiated on the Floor and transmitted to other markets, a
statement that members do not acquire a property interest in their
assigned band width, a requirement that affiliates be treated as a
single entity for purposes of band width assignment and a reduction in
the number of hand held terminals that the system is able to support in
view of anticipated demand for this capacity.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \1\ in general and furthers the objectives
of Section 6(b)(5) \2\ in particular in that it is designed to prevent
fraudulent acts and practices, promote just and equitable principles of
trade, remove impediments to and perfect the mechanisms of a free and
open market, and, in general, protect investors and the public
interest.
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\1\ 15 U.S.C. 78f(b).
\2\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any inappropriate burden on competition.
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.
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 approve 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, N.W., 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 may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for inspection and copying at the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of the
Exchange. All submissions should refer to File No. SR-Amex-97-40 and
should be submitted by January 5, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-32650 Filed 12-12-97; 8:45 am]
BILLING CODE 8010-01-M