Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the American Stock Exchange, Inc. Relating to Amendments Updating Various Exchange Rules

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-35451; File No. SR-Amex-95-10]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

Change by the American Stock Exchange, Inc. Relating to Amendments

Updating Various Exchange Rules

March 7, 1995.

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 February

22, 1995, 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 Exchange proposes to amend several of its rules to reflect

current practices and to update various rules that have become

obsolete. The text of the proposed rule change is as follows [new text

is italicized; deleted text is bracketed]:

Over-the-Counter Execution of Equity Securities Transactions

Rule 5.

(d)

[viii any acquisition of a security by a member organization as

principal in anticipation of making an immediate special offering or

exchange distribution on the Exchange under Rule 560 or Rule 570;]

[ix] viii

[x] ix

[xi] x

Precedence Accorded to Orders Entrusted to Specialists

Rule 155.

Commentary .01 [When a broker inquiries of a specialist as to the

price at which a block of stock may be sold, the specialist may not

specify the amount that would be purchased by the book and the amount

he would take as dealer.]

If [the] a block is to be sold at a ``clean up'' price the

specialist should execute at the ``clean-up'' price all of the

executable buy orders on his book. The report of the block transaction

on the tape is to be accompanied by a reprint of the last prior

transaction in the regular-way market in the security.

However, if the block is sold at different price limits and the

specialist buys part of the block for his own account he should to the

extent practicable, buy round lots for his own account at each price

limit at which buy orders on the book are executed, and in doing so, he

should divide the stock purchased for his own account into round lots

of approximately equal size among the price limits at which he

participates.

The same principles apply in the case of a purchase of a block of

stock.

Cancellations Must Be Written

Rule 181. A cancellation of an order given to a specialist on the

Floor of the Exchange personally by a Regular member or member

representative shall not be deemed effective unless in writing [and

signed].

Specialist Registration Fee

Rule 183. Each regular specialist registered with the Exchange

shall pay to the Exchange each year a registration fee [of $400.000 per

year] as imposed by the Exchange, [which fee shall be] payable [in

equal quarterly installments in each year] as directed by the Exchange

during [which] the year such specialist remains so registered.

Specialist Clerks

Rule 184. (a) A specialist or specialist unit may regularly employ,

subject to such rules and regulations as the Board of Governors may

adopt, one or more clerks, to aid such specialist or specialist unit on

the floor of the Exchange, provided each such clerk receives the

approval of the Exchange. A yearly fee [of $180.00 per year,] as

imposed by the Exchange and payable as directed by the Exchange [in

equal quarterly installments,] shall be charged the specialist or

specialist unit for each clerk. No rebate shall be given with respect

to the [quarterly] fee in the event that a specialist or specialist

unit discontinues the services of such a clerk during any [quarterly]

period.

Normal Buy-Ins

Rule 783.

(d) The Buy-in Desk will deliver a copy of the Floor report to the

booth of the member or member organization which initiated the order.

The executing broker will have the responsibility of notifying promptly

as to the details of the execution, the member or member organization

listed on the order as being in default. [The member executing the

order shall be entitled to receive a Floor brokerage 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

1. Purpose

The Exchange proposes a rule change that would conform its rule to

a comparable New York Stock Exchange (``NYSE'') rule, which recently

has been amended. The Exchange proposes to amend Commentary .01 to Rule

155 (Precedence Accorded to Orders Entrusted to Specialists) to delete

the prohibition that a specialist may not disclose the amount of stock

that the specialist and the book would be buying or selling in cleaning

up the block. This proposed rule change is similar to the NYSE

amendment to its Rule 104.10(7), which has been approved by the

Commission.\1\

\1\See Exchange Act Release No. 34231 (June 17, 1994), 59 FR

32722 (approving File No. SR-NYSE-90-10).

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The Exchange is also updating other rules to eliminate obsolete

references and reflect accurately current Exchange practices. The

references in Rule [[Page 13743]] 5(d)(viii) (Over-the-Counter

Execution of Equity Securities Transactions) to Rules 560 and 570 are

being deleted because Rules 560 and 570 have been rescinded. The

Exchange is also deleting the signature requirement in Rule 181

(Cancellations Must Be Written) to reflect the current practice. The

signature requirement, going back to the N.Y. Curb Exchange circa 1939,

has not been deemed necessary on the Trading Floor in the era of the

printed ticket.

The Exchange is also amending Rules 183 (Specialist Registration

Fee) and 184 (Specialist Clerks) to eliminate out-of-date charges and

timing of payments. The Exchange proposes to use general language in

the rules to alleviate the need for repeated amendments to the Exchange

Rules each time these fees are changed. The Exchange will make the

necessary rule filings with the Commission before any fee changes

become effective. The Exchange is also amendment Rule 783(d) (Normal

Buy-Ins) to delete the reference to a member's entitlement to a Floor

brokerage commission because the commissions are negotiated.

2. Statutory Basis

The proposed rule change is consistent with Section 6(b)(5) of the

Act in that it is designed to prevent fraudulent and manipulative acts

and practices and to perfect the mechanism of a free and open market.

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

The Exchange does not believe that the proposed rule change will

impose any inappropriate 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 either solicited or received.

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, N.W., 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 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, N.W.,

Washington, D.C. 20549. Copies of such filing will also be available

for inspection and copying at the principal office of the Exchange. All

submissions should refer to File No. SR-Amex-95-10 and should be

submitted by April 4, 1995.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95-6164 Filed 3-13-95; 8:45 am]

BILLING CODE 8010-01-M