[Federal Register Volume 63, Number 200 (Friday, October 16, 1998)]
[Notices]
[Pages 55660-55661]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-27821]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40533; File No. SR-AMEX-98-36]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the American Stock Exchange,
Inc. Relating to the Extension of the Exchange's Pilot Program for
Specialists in Portfolio Depositary Receipts, Investment Trust
Securities and Index Fund Shares to Participate In the After-Hours
Trading Facility
October 8, 1998.
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 October 2, 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 self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested person.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The Exchange is proposing to extend the pilot program permitting
specialists in Portfolio Depository Receipts (``PDRs'') \3\, investment
trust securities and Index Fund Shares to particpiate in the After-
Hours Trading (``AHT``) facility to ``clean-up'' order imbalances and
to effect closing price coupled orders. The text of the proposed rule
change is available at the Office of the Secretary, Amex and at the
Commission.
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\3\ The Exchange currently lists three Portfolio Depository
Receipts: Depository Receipts on the Standard and Poor's
500 and Mid Cap Indexes and Depository Receipts
on the Dow Jones Industrial Average TM. The Exchange also
lists 17 Index Fund Shares which are commonly referred to as
WEBSsm. WEBS are shares issued by an open-end management
investment company that seeks to provide investment results that
correspond generally to the price and yield performance of a
specified foreign or domestic equity market index. The Exchange
currently lists WEBS based on the following Morgan Stanley Capital
International ``MSCI'') indices: MSCI Australia Index, MSCI Austria
Index, MSCI Belgium Index, MSCI Canada Index, MSCI France Index,
MSCI Germany Index, MSCI Hong Kong Index, MSCI Italy Index, MSCI
Japan Index, MSCI Malaysia Index, MSCI Mexico Index, MSCI
Netherlands Index, MSCI Singapore (Free) Index, MSCI Spain Index,
MSCI Sweden Index, MSCI Switzerland Index, and MSCI United Kingdom
Index. The Commission notes that due to certain restrictions imposed
by the Malaysian government WEBS based on the MSCI Malaysia Index
currently trade differently than the other WEBS trading on Amex.
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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 seeks an extension to October 31, 1998, of the pilot
program permitting specialists in PDRs, investment trust securities and
Index Fund Shares to participate in the AHT facility to ``clean-up''
order imabalances and to effect closing price coupled orders.
The Exchange believes that an extension of the Exchange's pilot
program to permit specialists in PDRs, investment trust securities and
Index Fund Shares to participate in the AHT facility in order to
``clean-up'' order imbalances and effect closing price coupled orders
would benefit investors by providing additional liquidity to the listed
cash market for derivative securities based upon well known market
indexes. Investor interest in these securities is rapidly increasing,
and specialist participant in the AHT session provides necessary
liquidity after the close of the regular trading session. In addition,
the market price of these exchange traded funds is based upon
transactions largely effected in markets other than the Amex. (In the
case of Index Fund Shares, the market price of these securities is
based exclusively on transaction occurring outside the Amex). The
specialist in the Amex listed securities has no unique access to market
sensitive information regarding the market for the underlying
securities or closing index values. The Exchange, therefore, believes
that specialist participation in the AHF facility in PDRs, investment
trust securities and Index Fund Shares in the manner previously
approved by the Commission on a pilot basis does not raise any market
integrity issues. In addition, should a customer not care for an
execution at the closing price, the rules of the Exchange's AHT
facility permit cancellation of an order up to the close of the AHT
session at 5:00 p.m. (Orders in the AHT facility are not executed until
the 5:00 p.m. close of the After-Hours session.) A customer, therefore,
has approximately 40 minutes to determine if an execution at the
closing price suits his needs and may cancel the order if he believes
that the closing price does not suit his objectives.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section
[[Page 55661]]
6(b) \4\ of the Act, in general, and furthers the objectives of Section
6(b)(4),\5\ in particular, in that it is designed to prevent fraudulent
manipulative acts and practices, promote just and equitable principles
of trade, remove impediments to and perfect the mechanism of a free and
open market and a national market system and, in general, protect
investors and the public interest.
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\4\ 15 U.S.C. 78f(b).
\5\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change would
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 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
The foregoing rule change is concerned solely with the
administration of the Exchange and, therefore, has become effective
pursuant to Section 19(b)(3)(A) of the Act \6\ and subparagraph (e) of
Rule 19b-4 thereunder.\7\ 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.
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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(e)(3).
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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. 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 in the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of Amex.
All submissions should refer to the File No. SR-AMEX-98-36 and should
be submitted by November 6, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-27821 Filed 10-15-98; 8:45 am]
BILLING CODE 8010-01-M