On February 24, 2003, the American Stock Exchange LLC (“Amex” or “Exchange”), filed with the Securities and Exchange Commission (“Commission”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, a proposed rule change relating to the operation of its After Hours Trading Facility (“AHTF”). Notice of the proposed rule change was published for comment in the Federal Register on August 20, 2003. No comments were received on the proposed rule change.
Current Amex rules provide that only specialists registered in Portfolio Depositary Receipts, Index Fund Shares or unit investment trusts may participate in the AHTF for their dealer account in these securities. In brief, Amex now proposes to permit specialists in stocks or other equity-traded securities to do so in order to offset an imbalance of orders in the AHTF. In such a case, if any open agency orders to buy or sell on the specialist's book limited to the closing price remain unexecuted after the specialist buys or sells the security at its price in the AHTF, the specialist will be required to offer that execution to each such order in time priority until it is accepted or all such orders have rejected it.
After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange. Specifically, the Commission finds that the proposal is consistent with Section 6(b)(5) of the Act, which requires, among other things, that the rules of an exchange be designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market, to protect investors and the public interest, and not designed to permit unfair discrimination between customers, issuers, brokers, or dealers. The Commission believes that the proposed rule change appears to be reasonably designed to reduce volatility on the close by allowing Amex specialists to offset order imbalances in the AHTF with orders for their dealer accounts.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change (File No. SR-Amex-2003-10) be, and it hereby is, approved.Start Signature
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Margaret H. McFarland,
4. In approving this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78(c)(f).Back to Citation
[FR Doc. 03-24752 Filed 9-29-03; 8:45 am]
BILLING CODE 8010-01-P