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Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the American Stock Exchange LLC Providing Access to the Trading Floor by Allied Members and Former Members

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Start Preamble March 29, 2000.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] notice is hereby given that on Start Printed Page 17935March 7, 2000, 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, II, and III below, which Items have been prepared by the Amex. The Amex filed the proposal pursuant to Section 19(b)(3)(A) of the Act,[2] and Rule 19b-4(f)(6) thereunder,[3] 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.

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

The Amex proposes to amend its Constitution to provide access to its trading floor (“Trading Floor” or “Floor”) by allied members and to establish a formal policy of permitting former members who have worked on the Trading Floor for more than 10 years to visit the Floor. The text of the proposed rule change is available upon request from the Amex or 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 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

Allied members are individuals who exercise control over members or member organizations. From time to time, allied members visit the Floor to exercise managerial oversight and to discuss business with their personnel, clients and others. Currently, allied members are not allowed on the Floor unless they are signed-in as visitors. These visitor clearance procedures are inconsistent with the status of allied members at the Exchange and unnecessarily delay the access of allied members to the Floor. To rectify this situation, the Exchange proposes to amend Article IV to provide that allied members may have access to the Trading Floor without the need for clearing the Exchange's security procedures for visitors. Allied members will continue to be prohibited from effecting securities transactions on the Floor, except when effected in compliance with the provisions of Article IV, Section 3, of the Constitution, which provides that, under certain conditions, an approved allied member may be authorized to effect securities transactions as a “representative“ when (i) a governor who is associated with the allied member is away from the Floor on Exchange business, (ii) an Exchange Official who is associated with the allied member is away from the Floor to attend a meeting of the Amex Board, or (iii) a member who is associated with the allied member is away from the Floor due to the requirements of military service or training.

The Exchange is proposing to establish a formal policy of providing those individuals who were members for more than 20 years before leaving the Floor with gold identification badges allowing them access to the Floor as visitors without going through the sign-in procedures applicable to visitors.[4] Individuals who currently hold gold identification badges, but who have worked less than 20 years as members, would be permitted to keep their badges once the proposed policy is implemented. Going forward, however, an individual must have worked 20 years as a member on the Floor in order to receive the special gold identification badge. Eligible former members may only use their special access privileges for social purposes or to discuss membership leases. In addition, a Floor Official or other officer of the Exchange may terminate the special access privileges of a former member if these are used for purposes other than those expressly permitted, or if a former member disturbs the conduct of business at the Exchange.

2. Statutory Basis

The proposed rule change is consistent with Section 6(b) of the Act in general and furthers the objectives of Section 6(b)(5) [5] in particular in that its terms are 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 general, to protect investor and the public interest; and are not designed to permit unfair discrimination between customers, issuers, brokers or dealers.

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

The proposed rule change will impose no burden on competition 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

Written comments were neither solicited nor received with respect to the proposed rule change.

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

Because the foregoing proposed rule change does not:

(i) Significantly affect the protection of investors or the public interest;

(ii) impose any significant burden on competition; and

(iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, and since the Amex has given the Commission written notice of its intent to file the proposed rule change, along with a brief description and text of the proposed rule change, at least five business days prior to the date of filing of the proposed rule change, it has become effective pursuant to Section 19(b)(3)(A) of the Act [6] and Rule 19b-4(f)(6) 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.[8]

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule Start Printed Page 17936change is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 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, 450 Fifth Street, NW, Washington, DC 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-00-06 and should be submitted by April 26, 2000.

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

Start Signature

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


4.  As visitors, former members would remain subject to the Exchange's policies regarding visitors' access to the Floor. Telephone conversation between Bill Floyd-Jones, Assistant General Counsel, Amex, and Matthew Boesch, Paralegal, Division of Market Regulation, Commission, on March 29, 2000.

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8.  In reviewing this proposal, the Commission has considered the proposal's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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[FR Doc. 00-8323 Filed 4-4-00; 8:45 am]