Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the New York Exchange, Inc., Relating to Amendments to Rule 205 (Odd-Lot Orders).

SECURITIES AND EXCHANGE COMMISSION

Release No. 34-34416; File No. SR-Amex-94-15]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by the New York Exchange, Inc., Relating to Amendments to Rule

205 (Odd-Lot Orders).

July 21, 1994.

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

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

12, 1994, 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 persons.

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

of the Proposed Rule Change

The Amex proposes to amend Rule 205 (Manner of Executing Odd-Lot

Orders) (1) to provide that no differential shall be charged on odd-lot

order transactions (except for non-regular way trades); (2) to revise

provisions relating to the price at which certain odd-lot limit orders

shall be executed, and (3) to delete, reposition or re-number various

provisions relating to specific types of odd-lot orders.

The text of the proposed rule change is available at the Office of

the Secretary, the Amex and at 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 Amex 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 Section 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 proposes to amend Rule 205 relating to the execution

of odd-lot orders (1) to eliminate the odd-lot differential for market

and limit orders; (2) amend provisions relating to the price at which

odd-lot limit orders are executed; and (3) delete, reposition or re-

number various provisions relating to specific types of odd-lot orders

in Rule 205, Section B.

Under current Exchange rules, market odd-lot orders to buy or sell,

as well as marketable limit orders, are executed with no differential

charged.\1\ However, a differential may be charged in connection with

executions of odd-lot limit orders, market orders to sell marked

``short,'' stop orders, and other types of orders (e.g., orders to buy

or sell ``at the close''). In order to enhance the competitiveness of

Exchange odd-lot execution procedures, the Exchange has determined to

require the execution of all odd-lot market or limit orders (except for

non-regular way executions under proposed Section C(2) of the rule)

without a differential.

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\1\Procedures for executing odd-lot market orders are currently

being implemented on a pilot basis, extended until August 8, 1994.

See Securities Exchange Act Release No. 33584 (February 7, 1994), 59

FR 6983 (February 14, 1994).

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Rule 205, Section A(2) would require that limited orders to buy

(sell) be executed at the price of the first round lot transaction

which is at or below (above) the specified limit price (the ``effective

transaction'' price). Sell limited orders marked ``short'' would be

executed at the price of the first round lot transaction which is at or

above the specified limit and which is also higher than the last

different round lot transaction price (a ``plus'' or ``zero-plus''

tick). Marketable limit orders would continue to be executed in

accordance with procedures applicable to market orders.

Provisions relating to orders that are infrequently or never

entered (i.e., limited orders to buy an offer, sell on bid, ``immediate

or cancel''; buy or sell marked ``or on close'') would be deleted.

Provisions relating to ``seller's option'' or cash trades in Section C

would be deleted and subsumed by new Section C(2) (Non-Regular Way

Trades). A differential could be charged on such executions.

2. Statutory Basis

The proposed rule change will advance the objectives of 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 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, and in general, to protect investors and the public

interest.

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

The Exchange does not believe that the proposed rule change will

impose any 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

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

Register or within such longer 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 approved 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, 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 maybe withheld from the public in accordance with the provisions

of 5 U.S.C. Sec. 552, will be available for inspection and copying at

the commission's Public Reference Section, 450 Fifth Street, N.W.,

Washington, D.C. 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-94-15 and should be

submitted by August 17, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland

Deputy Secretary.

[FR Doc. 94-18253 Filed 7-26-94; 8:45 am]

BILLING CODE 8010-01-M