# Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the American Stock Exchange, Inc., Relating to the Off-Site Storage of Customer Options Account Information > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-25552 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** October 17, 1994 ## Text SECURITIES AND EXCHANGE COMMISSION [Release No. 34-34811; File No. SR-Amex-94-37] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the American Stock Exchange, Inc., Relating to the Off-Site Storage of Customer Options Account Information October 7, 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 September 12, 1994, the American Stock Exchange, Inc. (``Amex'' or ``Exchange'') filed with the Securities and Exchange Commission (``SEC'' or ``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 Currently, paragraph (b), ``Maintenance of Customer Records,'' of Amex Rule 922, ``Supervision of Accounts,'' requires that background and financial information of customers who have been approved for options transactions be maintained at both the branch office servicing the customer's account and at the principal supervisory office with jurisdiction over the branch office. Amex Rule 922(b) also requires that copies of account statements be maintained at both the branch office supervising the accounts and at the principal supervisory office with jurisdiction over the branch for the most recent six-month period. The Amex proposes to amend Exchange Rule 922(b) to provide that the customer information and account statements currently maintained at the principal supervisory office may be maintained at a location other than the principal supervisory office if the documents and information are readily accessible and promptly retrievable. The text of the proposal is available at the Office of the Secretary, 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 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 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 (a) Purpose Presently, the rules of all the options exchanges and the National Association of Securities Dealers, Inc. (``NASD'') uniformly require that both the branch office servicing an options customer's account and the principal supervisory office having jurisdiction over the branch office retain account statements and other financial and background information for the account for supervisory purposes. With the advances in data storage and retrieval capability available through optical disks, fax machines, microfiche and computer, coupled with the escalating costs of storing records on-site, many member organizations prefer to store documents away from their principal supervisory offices. In this connection, an increasing number of member organizations have asked and received permission from the self- regulatory organizations (``SROs'') to store the required customer option account documents off-site so long as they are readily accessible and promptly retrievable. In view of the number of requests received by the SROs to store customer options information off-site, the Options Self-Regulatory Council (``OSRC'')\1\ has asked each of the options exchanges and the NASD to consider amending their rules to permit the principal supervisory office to store customer account information off-site. --------------------------------------------------------------------------- \1\The OSRC is a committee comprised of representatives from each of the options exchanges and the NASD. --------------------------------------------------------------------------- The Exchange believes that these off-site storage arrangements are consistent with the record retention requirement rules, provided the documents are readily accessible and promptly retrievable. In this regard, the proposed rule will not compromise the supervisory obligations of a member firm since the firm will still be required to maintain customer option account documents and information at the branch office servicing the customer's account. To ensure compliance with the provisions of the rule, the Amex states that it will periodically examine the document retrieval capabilities of member firms using off-site document storage arrangements. (b) Basis The Amex believes that 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 prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities and to remove impediments to and perfect the mechanism of a free and open market and a national market system. (B) Self-Regulatory Organization's Statement on Burden on Competition The Amex 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 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 after 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 reason for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (a) By order approve such 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. Copies of such filing will also be available for inspection and copying at the principal office of the above-mentioned self-regulatory organization. All submissions should refer to the file number in the caption above and should be submitted by November 7, 1994. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\2\ \2\17 CFR 200.30-3(a)(12) (1993). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 94-25552 Filed 10-14-94; 8:45 am] BILLING CODE 8010-01-M --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-25552. Public record. Not legal advice.