Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by American Stock Exchange, Inc. Relating to the Floor Official Zone System

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-33980; File No. SR-Amex-94-11]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by American Stock Exchange, Inc. Relating to the Floor Official

Zone System

April 28, 1994.

Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on April

18, 1994, the American Stock Exchange, Inc. (``Amex'' or ``Exchange'')

filed with the Securities and Exchange Commission (``Commission'' or

``SEC'') 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 persons.

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

of the Proposed Rule Change

The Exchange is proposing to amend Amex Rule 22 to delete its

references to the Floor Official zone system, and provide that matters

which currently require the approval of a majority of the Floor

Officials in a zone may be determined by a Floor Official with the

concurrence of a Senior Floor Official.\1\ The text of the proposed

rule change is available at the Office of the Secretary, Amex, and at

the Commission.

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\1\The Amex has clarified that the proposed rule change will

affect both its equity and options trading floors. Telephone

conversation between Claudia Crowley, Special Counsel, Legal and

Regulatory Policy, Amex, and Beth Stekler, Attorney, Division of

Market Regulation, SEC, on April 20, 1994.

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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 an 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 Trading Floor has historically been divided into zones

comprised of designated trading posts. Pursuant to Rule 22, the Senior

Supervisory Officer assigns Floor Officials to each zone and they are

expected to exercise their authority in their assigned zones. In

addition, Rule 22(c) provides that a majority of the available Floor

Officials in each zone may (i) restrict or ban trading by Registered

Traders, (ii) restrict or ban transactions pursuant to off-Floor orders

for accounts in which members or member organizations have an interest,

(iii) prohibit specialists from accepting stop or stop limit orders, or

(iv) restrict or ban the use of hand signals with respect to any or all

of the securities in their zone.

Rule 22 was adopted in 1965 at a time when all of the trading posts

were located on one main Trading Floor, the Exchange was not trading

options, and new types of trading products were not frequently added.

Although the zone system was useful when implemented, it is not

appropriate in today's environment. As a result of improved technology

and the faster pace of trading generally (and particularly in options

and other derivatives), members typically require quick resolution of

trading questions from Floor Officials. With the expansion of the

Trading Floor and changes in its configuration, it is unduly time-

consuming and burdensome to attempt to deal only with Floor Officials

assigned to a particular zone.

The Exchange is therefore proposing that Rule 22 be amended to (i)

delete the references to the zone system and permit Floor Officials to

make determinations anywhere on the Floor, and (ii) provide that

matters which currently require the approval of a majority of the Floor

Officials in a zone may be determined by a Floor Official with the

concurrence of one of the Senior Floor Officials.\2\

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\2\Pursuant to Exchange Rule 21(a), Senior Floor Officials

include the Floor Governors and those Exchange Officials who were

previously Floor Governors and continue to be active on the Floor.

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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) in particular

in that it is designed to promote just and equitable principles of

trade and remove impediments to and perfect the mechanism of a free and

open market.

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

The proposed rule change will impose no burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed

Rule Change Received From Members, Participants or Others

No written comments were solicited or received with respect to the

proposed rule change.

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

Commission Action

Within 35 days of the publication of this notice in the Federal

Register or within such other period (i) as the Commission may

designate up to 90 days of such date if it finds such longer period to

be appropriate and publishes its reasons for so finding or (ii) as to

which the self-regulatory organization consents, the Commission will:

(A) By order approve the proposed rule change, or

(B) Institute proceedings to determine whether the proposed rule

change should be disapproved.

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 NW., Washington, DC 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 at the

Commission's Public Reference Section, 450 Fifth Street. NW.,

Washington, DC 20549. 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-94-11 and should be

submitted by May 26, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

[FR Doc. 94-10748 Filed 5-4-94; 8:45 am]

BILLING CODE 8010-01-M