Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the American Stock Exchange, Inc. Relating to Amendments to Rule 117 (Circuit Breakers)

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38071; File No. SR-Amex-96-49]

Self-Regulatory Organizations; Notice of Filing of Proposed Rule

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

Rule 117 (Circuit Breakers)

December 20, 1996.

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 December

16, 1996, 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 Amex. 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 Exchange Rule 117 to increase circuit

breaker parameters. The Exchange proposes to implement the revised

parameters. The Exchange proposes to implement the revised parameters

on a one-year pilot basis.

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 Exchange included statements

concerning the purpose of the basis for the proposed rule change and

discussed any comments in received on the proposed rule change. The

text of these statements may be examined at the places specified in

Item IV below. The Amex 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

In conjunction with other major exchanges, the Amex filed a

proposal (SR-Amex-88-24 and 88-31) in October 1988 to implement trading

halts during significant market declines (generally referred to as

``circuit breakers''). Exchange circuit breaker procedures under Amex

Rule 117 have been extended most recently by the Commission until April

30, 1997.\1\ Amex Rule 117, as amended \2\ provides for temporary halts

in the trading of all stocks, stock options and index options on the

Exchange for one-half hour if the Dow Jones Industrial Average \3\

(``DJIA'') declines 250 points or more form the previous day's closing

value and for one hour if the DJIA declines 400 points from the

previous close. The Exchange proposes to amend Rule 117 to increase the

parameters that would trigger the 30 minute and one hour halt in

trading to 350 points and 550 points, respectively. The Exchange

believes these parameters constitute significant market declines, and

represent appropriate levels at which to halt trading. The Amex

proposes that these changes be implemented on a one-year pilot basis.

---------------------------------------------------------------------------

\1\ See Securities Exchange Act Release No. 37890 (October 29,

1996), 61 FR 56983 (November 5, 1996).

\2\ See Securities Exchange Act Release No. 37460 (July 19,

1996), 61 FR 39169 (July 26, 1996).

\3\ ``Dow Jones Industrial Average'' is a service mark of Dow

Jones & Company, Inc.

---------------------------------------------------------------------------

The adoption of amendments to Exchange Rule 117 would be contingent

upon the adoption of amended rules or procedures substantively

identical to Rule 117 by:

(1) All United States stock exchanges and the National Association

of Securities Dealers, Inc. with respect to the trading of stocks,

stock options and stock index options; and,

(2) All United States futures exchanges with respect to the trading

of stock index futures and options on such futures.

The Exchange believes that a trading halt requirement at

appropriate levels across all markets will promote stability and

investor confidence during periods of significant stress by providing

market participants with a reasonable opportunity to become aware of

and respond to significant price movements, thereby facilitating in an

orderly manner the maintenance of an equilibrium between buying and

selling interest.

2. Basis

The Exchange 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 promote

just and equitable principles of trade, to remove impediments to and

perfect the mechanism of a free and open market and, in general, to

protect investors and the public interest.

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

The Amex 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 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 date of 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 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, 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 in the

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

Washington, D.C. 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-96-49 and should be

submitted by January 21, 1997.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\4\

---------------------------------------------------------------------------

\4\ 17 CFR 200.30-3(a)(12).

---------------------------------------------------------------------------

[[Page 68806]]

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 96-33060 Filed 12-27-96; 8:45 am]

BILLING CODE 8010-01-M