Self-Regulatory Organizations; Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change by the American Stock Exchange, Inc. Relating to Exchange Policy on Indications, Openings and Reopenings

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38549; File No. SR-AMEX-97-13]

Self-Regulatory Organizations; Notice of Filing and Order

Granting Accelerated Approval of Proposed Rule Change by the American

Stock Exchange, Inc. Relating to Exchange Policy on Indications,

Openings and Reopenings

April 28, 1997.

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 March 5, 1997, 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 and

Ii 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 and to

grant accelerated approval to the proposed rule change.

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\1\ 15 U.S.C. Sec. 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 revise Exchange policy regarding indications,

openings and reopenings. 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 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 III 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

Amex specialists disseminate indications of interest to the

consolidated tape prior to the opening or reopening of trading in a

previously halted stock, or in the event of a delayed opening. These

indications communicate the probable price range where the stock will

open or reopen.

The Amex's policy on dissemination of tape indications currently

requires a minimum of 15 minutes to elapse between the first indication

and the opening or reopening of a stock. In addition, when multiple

indications are used, a minimum of 10 minutes must elapse after the

last indication when it does not overlap the prior indication, and a

minimum of 5 minutes must elapse after the last indication when it

overlaps the prior indication.

The Exchange is proposing that these minimum time periods before

opening or reopening a stock be compressed from 15 to 10 minutes after

the first indication; and to 5 minutes after the last indication,

regardless of whether it overlaps the prior indication, provided that a

minimum of 10 minutes elapses between the first indication and the

opening or reopening of a stock. The proposed rule shortens the time

period for indications and strikes an appropriate balance between

preserving the price discovery process while providing timely

opportunities for investors to participate in the market.

2. Statutory Basis

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

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

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 proposed rule change will impose no 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. 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

[[Page 24520]]

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 Room. 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-97-13 and should be

submitted by May 27, 1997.

IV. Commission's Findings and Order Granting Accelerated Approval of

Proposed Rule Change

The Commission finds that the proposed rule change is consistent

with the requirements of the Act and the rules and regulations

thereunder applicable to a national securities exchange, and, in

particular, with the requirements of Section 6(b) of the Act.\3\

Specifically, the Commission believes the proposal is consistent with

the Section 6(b)(5) \4\ requirements that rules of an exchange be

designed to promote just and equitable principles of trade, to prevent

fraudulent and manipulative acts, and, in general, to protect investors

and the public.\5\

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\3\ 15 U.S.C. Sec. 78f(b).

\4\ 15 U.S.C. Sec. 78f(b)(5).

\5\ In approving this rule change, the Commission has considered

the proposed rules' impact on efficiency, competition, and capital

formation. 15 U.S.C. Sec. 78c(f).

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Specifically, the Exchange proposed that minimum time periods

before opening or reopening a stock be compressed from 15 to 10 minutes

after the first indication; and to 5 minutes after the last indication,

provided that a minimum of 10 minutes elapsed between the first

indication and the opening or reopening of a stock. For example, if

only 3 minutes had elapsed from the time of the first indication to the

second indication, the minimum waiting period after the second

indication would be 7 minutes.

The Commission agrees with the Exchange that due to increases in

the speed of communications, relevant market information can be

disseminated and responded to very quickly. The Commission finds

reasonable the Exchange's determination that the propose rule change

will allow the opening or reopening of a stock in a more expeditious

fashion while still providing sufficient time for appropriate pricing

of orders. The Commission finds that in the rule change, the Exchange

has made a reasonable determination that balances the preservation of

the price discovery process while providing timely opportunities for

investors to participation in the market. Exchange staff has

represented that the change in the timing of tape indications is

consistent with Intermarket Trading System re-opening procedures.\6\

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\6\ Telephone conversation between Mike Cavalier, Attorney, Amex

and David Sieradzki, Attorney, SEC, on March 20, 1997.

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The Commission finds good cause for approving the proposed rule

change prior to the thirtieth day after the date of publication of

notice of filing thereof in the Federal Register. The rule change is

being approved with a corresponding amendment to Section XI(a) (Trading

Halt and Suspension Procedures) of the Consolidated Tape Association

Plan.\7\ An identical policy on indications, openings, and reopenings

was approved for use on the New York Stock Exchange on January 31, 1997

following a full notice period during which no comments were

received.\8\

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\7\ See Securities Exchange Release No. 38546 (Apr. 25, 1997).

\8\ See Securities Exchange Act Release No. 38225 (Jan. 31,

1997), 62 FR 5875 (Feb. 7, 1997) (order approving File No. SR-NYSE-

96-32).

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It is therefore ordered, pursuant to Section 19(b)(2) of the

Act,\9\ that the proposed rule change (SR-AMEX-97-13) is approved.

\9\ 15 U.S.C. Sec. 78s(b)(2).

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For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.\10\

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\10\ 17 CFR 200.30-3(a)(12).

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Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97-11607 Filed 5-2-97; 8:45 am]

BILLING CODE 8010-01-M