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Self-Regulatory Organizations; Order Approving Proposed Rule Change and Amendment Nos. 1, 2, 3, and 4 Thereto by the American Stock Exchange LLC Relating to At-the-Close Orders and Auxiliary Opening Procedures

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Information about this document as published in the Federal Register.

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Start Preamble February 12, 2004.

On March 27, 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”) [1] and Rule 19b-4 thereunder,[2] a proposed rule change to (1) to adopt Amex Rule 131A to set forth Exchange rules and procedures regarding at-the-close orders; (2) to amend Amex Rules 131 and 156 relating to at-the-close orders; (3) to implement additional procedures, relating to daily at-the-close procedures and expiration day auxiliary opening procedures; and (4) to adopt Amex Rule 118(m) to reflect procedures applicable to at-the-close orders in Nasdaq securities traded on the Exchange pursuant to unlisted trading privileges. On September 10, 2003, the Amex amended the proposed rule change.[3] On October 20, 2003, the Start Printed Page 8249Amex amended the proposed rule change.[4] On November 14, 2003, the Amex amended the proposed rule change.[5]

The proposed rule change and Amendment Nos. 1, 2, and 3 were published for comment in the Federal Register on November 28, 2003.[6] The Commission received no comments on the proposal. On January 9, 2004, the Amex filed Amendment No. 4 to the proposed rule change.[7] This order approves the proposed rule change.

In the filing, the Amex states that the proposed rule change consolidates current Exchange procedures regarding MOC and LOC orders in Rule 131A. In addition, paragraph (m) of Rule 118 establishes MOC and LOC procedures for Nasdaq securities that are substantially similar to the procedures proposed in Rule 131A. Amex is implementing an MOC Imbalance Calculation Policy and amending its MOC Imbalance Publication Policy so that it more closely resembles the New York Stock Exchange's (“NYSE”) policy as set out in NYSE Rule 123C(5). The Amex states that the most salient feature of the revised policies is the additional dissemination of an imbalance at 3:50 p.m.

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.[8] The Commission believes that the proposed rule change is consistent with Section 6(b) of the Act,[9] in general, and furthers the objectives of section 6(b)(5),[10] in particular, in that it is designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities, to remove impediments to and perfect the mechanism of a free and open market and a national market system, and in general, to protect investors and the public interest. Specifically, the Commission believes that the Amex's proposal to amend its rules governing at-the-close orders and auxiliary opening procedures on the Exchange may provide useful information to market participants and may minimize price volatility on the close. In addition, the Commission believes that the proposed rule change may result in the public dissemination of information that more accurately reflects the trading in a particular security on the Exchange at the close.

For the foregoing reasons, the Commission finds that the proposed rule change is consistent with the requirements of the Act and rules and regulations thereunder.

It is therefore ordered, pursuant to section 19(b)(2) of the Act [11] , that the proposed rule change (SR-Amex-2003-21) is approved.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[12]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  See letter from Claire P. McGrath, Senior Vice President and Deputy General Counsel, Amex, to Nancy Sanow, Assistant Director, Division of Market Regulation (“Division”), Commission, dated September 9, 2003 (“Amendment No. 1”).

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4.  See letter from Claire P. McGrath, Senior Vice President and Deputy General Counsel, Amex, to Nancy Sanow, Assistant Director, Division, Commission, dated October 17, 2003 (“Amendment No. 2”).

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5.  See letter from Claire P. McGrath, Senior Vice President and Deputy General Counsel, Amex, to Nancy Sanow, Assistant Director, Division, Commission, dated November 13, 2003 (“Amendment No. 3”).

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6.  See Securities Exchange Act Release No. 48813 (November 20, 2003), 68 FR 66898.

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7.  See letter from Claire P. McGrath, Senior Vice President and Deputy General Counsel, Amex, to Nancy Sanow, Assistant Director, Division, Commission, dated January 8, 2004 (“Amendment No. 4”). In Amendment No. 4, the Amex revised the text of the proposed rule change to correct a number of typographical errors. This was a technical amendment and is not subject to notice and comment.

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

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[FR Doc. 04-3781 Filed 2-20-04; 8:45 am]

BILLING CODE 8010-01-P