Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the American Stock Exchange, Inc. Relating to Dissemination of Indications in Connection With Circuit Breaker Trading Halts Under Rule 117

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-37356; File No. SR-Amex-96-21]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

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

of Indications in Connection With Circuit Breaker Trading Halts Under

Rule 117

June 24, 1996.

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

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that

on June 17, 1996, 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.

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\1\ 15 U.S.C. 78s(b)(1).

\2\ 17 CFR 240.19b-4.

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

of the Proposed Rule Change

The Amex proposes to implement guidelines for dissemination of

indications to the consolidated tape in connection with the resumption

of trading following a ``circuit breaker'' trading halt pursuant to the

Amex's Rule 117.\3\

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\3\ The Commission notes that Rule 117--the Exchange's ``circuit

breaker'' rule--provides that trading in securities on the Exchange

shall halt (a ``Rule 117 halt'') and not reopen for one hour if the

Dow Jones Industrial Average (``DJIA'') falls 250 points or more

below its closing value on the previous trading day. The rule

provides further that trading on the Exchange shall halt for two

hours if the DJIA falls 400 points or more on that same day. Rule

117 was approved by the Commission on a pilot basis on October 19,

1988 and has been extended annually since then. See Securities

Exchange Act Release No. 36414 (Oct. 25, 1995), 60 FR 55630 (Nov. 1,

1995) (Commission's most recent order extending temporary approval

of Rule 117).

The Amex has filed a proposal to amend Rule 117 to reduce from

one hour to thirty minutes the time period during which trading is

halted due to a decline in the DJIA of 250 points below its closing

value on the previous trading day, and to reduce from two hours to

one hour the time period for a halt due to a 400 points decline in

the DJIA. See Securities Exchange Act Release No. 37146 (April 26,

1996), 61 FR 19650 May 2, 1996). The Commission has not yet

completed its review of this proposed amendment.

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[[Page 33787]]

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 to implement guidelines for the mandatory

dissemination of indications to the consolidated tape in connection

with the resumption of trading following a circuit breaker halt

pursuant to its Rule 117. The purposes of the proposed criteria is to

provide guidance to the Exchange's specialists as to the specific

circumstances under which they are required to disseminate indications

if a significant decline in the price of a stock from the previous last

sale on the Exchange is anticipated when trading resumes following a

circuit breaker halt.

The Exchange proposes to implement the following guidelines:

Dissemination of an indication shall be mandatory prior to

the reopening of trading if such reopening will result in a price

change constituting the lesser of 10% or three points from the last

sale reported on the Amex, or five points if the previous reported last

sale is $100 or higher. No indications would be required if the price

change is less than one point.

If, on any day that a Rule 117 halt is in effect, trading

in a security has not reopened by one-half hour after the resumption of

trading on the Exchange, the matter should be treated as a delayed

opening, and would require an indication as well as a Floor Official's

supervision.

The Exchange has existing procedures which require dissemination of

indications prior to delayed openings and reopenings following

regulatory or non-regulatory halts in individual securities. The

Exchange will continue to require dissemination of indications in those

situations.\4\

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\4\ The Exchange notes that the proposed criteria are identical

to those currently in place at the New York Stock Exchange

(``NYSE'') in connection with circuit breaker halts under NYSE Rule

80B. See Securities Exchange Act Release No. 26419 (January 5,

1989), 54 FR 1041 (January 11, 1989).

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2. Statutory Basis

The basis under the Act for this proposed rule change is the

requirement under Section 6(b)(5) that an exchange have rules that are

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 protect 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.

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 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 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. 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-96-21 and should be

submitted by July 19, 1996.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\5\

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\5\ 17 CFR 200.30-3(a)(12).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96-16574 Filed 6-27-96; 8:45 am]

BILLING CODE 8010-01-M