[Federal Register Volume 63, Number 19 (Thursday, January 29, 1998)]
[Pages 4506-4507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-2188]



[Release No. 34-39570; File No. SR-Amex-98-2]

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the American Stock Exchange, 
Inc., To Revise the Exchange's Equity Fee Schedule To Include 
Transactions in DIAMONDS

January 22, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on January 12, 1998, 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 Exchange. The Commission is publishing this notice 
to solicit comments on the proposed rule change from interested 

    \1\ 15 U.S.C. 78s(b)(1).

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange seeks to revise its Equity Fee Schedule to reflect to 
transaction charges that will be imposed on trades in the newly listed 
and traded product called DIAMONDS.TM The Exchange commenced 
trading in DIAMONDS on January 20, 1998.
    The text of the proposed rule change is available at the Office of 
the Secretary, the Exchange, 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 Exchange 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 Exchange has prepared summaries, set forth in 
sections A, B, and C below, of the most significant aspects of such 

[[Page 4507]]

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Purposed Rule Change

1. Purpose
    The Exchange recently amended its Equity Fee Schedule to revise the 
transaction charges that apply to trades in Standard & Poor's 
Depositary Receipts (``SPDRs'') and Standard Poor's MidCap Depositary 
Receipts (``MidCap SPDRs'') \2\. The transaction charges vary depending 
on for whom the trade is executed. Under the updated fee schedule, 
specialists are assessed a transaction charge of $.006 per share ($.60 
per 100 shares), capped at $300 per trade (50,000 shares). Registered 
Traders are assessed a transaction charge of $.007 per share ($.70 per 
100 shares), capped at $350 per trade (50,000 shares). Off-floor orders 
(both customer and broker-dealer) are assessed a transaction charge of 
$.006 per share ($.60 per 100 shares), capped at $100 per trade 
(16,667) shares).

    \2\ See Securities Exchange Act Release No. 39333 (Nov. 17. 
1997), 62 FR 62795 (Nov. 25, 1997).

    In addition, orders up to 5,099 shares in SPDRs and MidCap SPDRs 
routed to the Exchange floor electronically through the Exchange's Post 
Execution Reporting (PER) System are exempt from transaction charges. 
This provision is consistent with the waiver that also exempts from 
transaction charges those PER System orders for up to 1,099 shares in 
equity securities. However, neither of those exemptions may be applied 
to a PER System order that is for the account of a non-member competing 
market maker.\3\ Lastly, all trades executed on the Exchange in SPDRs 
and MidCAP SPDRs are exempt from the Exchange's Regulatory Fee ($.00005 
 x  Total Value).\4\

    \3\ The Amex Equity Fee Schedule defines a ``competing market 
maker'' as a specialist or market maker registered as such on a 
registered stock exchange (other than Amex), or a market maker 
bidding and offering over-the-counter, in an Amex-traded security.
    \4\ Like the previously described exemptions, this provision 
does not apply to PER System orders that are for the accounts of 
non-member competing market makers.

    The Exchange seeks to impose on DIAMONDS the same transaction 
charge schedule that currently applies to trading in SPDRs and MidCap 
SPDRs. As a result, all transaction charges and exemptions therefrom 
now applicable to SPDRs and MidCap SPDRS will also apply to trades in 
DIAMONDS. The exchange also proposed to charge the specialist in 
DIAMONDS, in addition to the $.006 per share transaction charge, a 
separate fee of $90,000 per month payable at the beginning of each 
    These changes are intended to lower the costs incurred by users of 
the DIAMONDS product while making the cost of trading DIAMONDS on the 
Exchange comparable to the economics of trading this and functionally 
similar products in other markets. The revisions to the Equity Fee 
Schedule have been implemented by the Exchange concurrently with the 
start of trading in DIAMONDS. Accordingly, the Exchange notified member 
firms regarding the changes to the equity Fee Schedule, as well as the 
date of their effectiveness.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section 6(b) of the Act,\5\ in general, and furthers the objectives of 
Section 6(b)(4),\6\ in particular, in that it is designed to assure the 
equitable allocation of reasonable dues, fees, and other charges among 
members, issuers, and other persons using the Exchange's facilities.

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe 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

    The Exchange did not solicit or receive written comments with 
respect to the proposed rule change.

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

    The foregoing proposed rule change establishes or changes a due, 
fee, or other charge imposed by the Exchange and, therefore, has become 
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and 
subparagraph (e) of Rule 19b-4 \8\ thereunder. 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.

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(e).

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 submissions, 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 persons, 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, 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 Exchange. All 
submissions should refer to File No. SR-Amex-98-2 and should be 
submitted by February 19, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\

    \9\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-2188 Filed 1-28-98; 8:45 am]