Federal Register / Vol. 66, No. 184 / Friday, September 21, 2001 / Notices 48723
Cleveland Electric Illuminating the distribution and transportation of Company (‘‘NEO Construction’’), a Company (‘‘Cleveland Electric’’), and natural gas. NONGC had total assets of wholly owned subsidiary of NOOCI (the The Toledo Edison Company (‘‘Toledo $18,374,761 and $25,319,652 as of ‘‘LDC Transaction’’). Upon the asset Edison’’), and indirectly owns all of the December 31, 2001, and June 30, 2001, transfer to NEO Construction, NEO issued and outstanding voting securities respectively. Construction became a gas utility of Pennsylvania Power Company (‘‘Penn Effective June 4, 1998, FirstEnergy company under the Act. On July 7, Power’’), and Northeast Ohio Natural acquired all of the outstanding shares of 2000, NEO Construction changed its Gas Corp. (‘‘NONGC’’). Ohio Edison, MARBEL (the ‘‘MARBEL Acquisition’’). name to ‘‘Northeast Ohio Natural Gas Cleveland Electric, Toledo Edison and The MARBEL Acquisition expanded Corp.’’ 4 On March 30, 2001, NOOCI was Penn Power, collectively comprise the FirstEnergy’s products and services to merged into its parent, MARBEL (the ‘‘FirstEnergy Operating Companies.’’ include the exploration, production, ‘‘MARBELL Merger’’). Consequently, the Ohio Edison directly owns 16.5% of the distribution, transmission, and assets of NOOCI, which include all of issued and ouststanding voting marketing of natural gas and oil. Prior the issued and outstanding stock of securities of Ohio Valley Electric to the closing of the MARBEL NONGC, are now owned by MARBEL. Corporation (‘‘OVEC’’), and OVEC owns Acquisition, an internal reorganization In this application, Applicant requests all of the issued and outstanding voting took place within the MARBEL system, that the Commission authorize the securities of Indiana-Kentucky Electric as a result of which NONGC—the only acquisition of all of the issued and Corporation (‘‘IKEC’’). The FirstEnergy company in the MARBEL system that outstanding voting securities of NONGC Operatomg Companies, ATSI, NONGC, was a public utility company under the by First Energy. NONGC is held OVEC, and IKEC, are all public utility Act—was merged into a sister company: indirectly by FirstEnergy through companies as defined in the Act. For the Gas Transport, Inc. (‘‘Gas Transport’’).2 MARBEL. twelve months ending December 31, On May 24, 2000, the assets of the For the Commission, by the Division of 2000, FirstEnergy had told revenue of local gas distribution division of Gas Investment Management, pursuant to $7,028,961,000 and net income of Transport (‘‘LDC’’) were transferred to delegated authority. $598,970,000. FirstEnergy had total the Northeast Ohio Operating Margaret H. McFarland, assets of $17,941,294,000, as of Companies, Inc. (‘‘NOOCI’’), an December 31, 2000. Deputy Secretary. affiliated nonutility which was the [FR Doc. 01–23616 Filed 9–20–01; 8:45 am] In addition to its public utility parent company of NONGC and several BILLING CODE 8010–01–M holdings, FirstEnergy owns directly and other operating companies. On May 25, indirectly multiple nonutility 2000, Gas Transport, which at the time subsidiaries. MARBEL Energy only owned and operated transmission Corporation (‘‘MARBEL’’), a direct SECURITIES AND EXCHANGE pipelines, merged into Great Lakes COMMISSION nonutility subsidiary of FirstEnergy, is Transport, LLC (‘‘GLGT’’), a wholly the parent company of NONGC, a owned subsidiary of NOOCI. On May [Release No. 34–44802, File Nos. SR-Amex natural gas pipeline company, and 30, 2000, all of the membership units of 2001–80; SR–Phlx–2001–86] Marbel Holdco, Inc. (‘‘Marbel Holdco’’). GLGT were transferred to Great Lakes. Self-Regulatory Organizations; Notice Marbel Holdco holds FirstEnergy’s 50% This post-clearing transfer of GLGT to of Filing and Order Granting ownership in Great Lakes Partners, LLC Great Lakes comprises the ‘‘Great Lakes (‘‘Great Lakes’’). Great Lakes is an oil Accelerated Approval to Proposed Transaction.’’ 3 The Great Lakes and gas exploration and production Rule Changes Filed by the American Transaction was part of a corporate company in a 50/50 joint venture with Stock Exchange LLC (‘‘Amex’’) and the reorganization and no intercompany Range Resources Corporation (‘‘Range Philadelphia Stock Exchange, Inc. consideration was paid. The LDC assets Resources’’), a publicly traded, (‘‘Phlx’’) Relating to Temporary were transferred at the book value nonutility oil and gas exploration and Trading of Amex Options on the Phlx assigned to these assets at the time of production company. Great Lakes holds To Respond to Market Developments the MARBEL Acquisition. a majority of its assets in the On July 1, 2000, NOOCI transferred Appalachian Basin. Those assets September 17, 2001. the assets of LDC to NEO Construction include more than 7,700 oil and natural Pursuant to section 19(b)(1) of the gas wells, drilling rights, proven Securities Exchange Act of 1934 2 Applicant maintains that as a result of the (‘‘Act’’) 1 and Rule 19b–4 thereunder, 2 resources of 450 billion cubic feet application of rule 7(a) under the Act, Gas equivalent of natural gas and oil, and Transport, as the time of the MARBEL Acquisition, notice is hereby given that on 5,000 miles of pipeline. Great Lakes also was not a gas utility company, and, therefore, the September 16, 2001, the American Stock owns intrastate gas pipelines and a MARBEL Acquisition did not require prior approval Exchange LLC (‘‘Amex’’) and the of the Commission under section (a) of the Act. Philadelphia Stock Exchange Inc. small interstate pipeline between Ohio 3 Applicants state that the Great Lakes and West Virginia. Transaction was part of a larger transaction that had (‘‘Phlx’’) (collectively referred to as NONGC provides gas distribution and occurred in 1999. Effective September 30, 1999, ‘‘Exchanges’’) submitted to the transportation service to approximately FirstEnergy and Range Resources formed Great Securities and Exchange Commission 5,000 customers located in ten counties Lakes, a 50/50 joint venture primarily designed to (‘‘SEC’’ or ‘‘Commission’’) proposed rule consolidate and integrate both companies’ gas and in central and northeast Ohio, and oil exploration operations in the Appalachian NONGC owns and operates Basin, including properties in Ohio, Pennsylvania, 4 NONGC has interconnections with and receives approximately 420 miles of distribution West Virginia, Kentucky, and Tennessee. The joint some gas from Ohio Interstate Gas Transmission and transportation pipeline. NONGC venture was created to reduce operating costs Company (‘‘OIGTC’’), a nonutility which is associated with exploration of reserves and regulated by Public Utilities Commission of Ohio receives its gas supplies from local gas servicing the oil and gas properties. Applicants and engages solely in the transportation of natural producers as well as from interstate state that the Great Lakes Transaction was gas. OIGTC was one of the companies contributed pipeline companies. For the twelve structured in the manner described above for tax by MARBEL to form Great Lakes on September 30, months ending December 31, 2000, reasons and in order to allow sufficient time to 1999. In addition, NONGC receives gas from direct secure approval from the FERC for the merger of interconnects with gathering pipelines owned by NONGC had total revenue of $6,074,120 Gas Transport into GLGT. Therefore, the utility Great Lakes. and net income of $112,985; operating operations of LDC remained within the FirstEnergy 1 15 U.S.C. 78s(b)(1). revenues were principally derived from system. 2 17 CFR 240.19b–4.
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changes. The Amex and Phlx The proposal includes two categories facilities will be limited to the Phlx descriptions of their respective of Amex members trading as Phlx ROTs options trading floor crowds where they proposed rule changes are set forth in or specialists: Amex ROTs and Amex have been granted access to trade by this Items I and II below. The Commission specialists. The proposal may also proposal and any other areas designated is publishing this notice to solicit include enabling Amex floor brokers to by the Phlx. comments on the proposed rule changes act as Phlx floor in Phlx/Amex options With respect to qualification of and form interested persons and to grant and non-Phlx Amex options (but not jurisdiction over Amex TAPs, the Phlx accelerated approval to the proposed Phlx options not traded on Amex). The intends to require submission of a form rule changes. Phlx anticipates Phase 1 to begin on containing an acknowledgement to Monday, September 17, 2001, and Phase abide by Phlx rules and submit to Phlx I. Self-Regulatory Organization’s 2 thereafter, possibly on the same day.3 jurisdiction, as well as other provisions Statements of the Terms of Substance of In addition, only Amex TAPs will be relating to Phlx floor activity and the Proposed Rule Changes permitted to trade non-Phlx Amex responsibility. The Acknowledgement As a result of the attacks on the World options that trade on the Phlx under this may also include the Phlx’s ability to Trade Center in New York City on proposal, unless deemed necessary by terminate Amex TAPs access and status, September 11, 2001, the building the Phlx for Phlx members to act as or to impose conditions on such access housing the trading facilities of the ROTs or floor brokers, in the interest of or status. Amex suffered physical damage. In fair and orderly markets. However, Phlx Further, this form will contain a addition, the area surrounding the specialist units may be allocated non- certification by both the Amex TAP and Amex has remained largely inaccessible Phlx Amex options if the current Amex the Amex as to the qualification of that to all but the most essential emergency specialist is not affiliated with a Phlx Amex member to trade on the Amex. and rescue personnel and many basic specialist unit, as described further Thus, qualified Amex TAPs, with services, such as electricity, water and below. approval from an appropriate Amex communication lines, have not been re- At this time, the Phlx is proposing official, will be deemed to have established as a result of the collapse of that Amex TAPs be permitted to act as satisfied, and the Phlx will waive Phlx members for purposes of specific compliance with, rules several buildings and ensuring fires. temporary access on the options trading governing or applying to the The Exchanges, therefore, propose to floors. As such, Amex TAPs will be maintenance of a person’s or a firm’s permit Amex members to trade Amex subject to the Phlx trading rules that status as a Phlx member, including the options on the floor of the Phlx on a would apply today to a Phlx member in 600 series of Phlx rules. In that regard, temporary basis until the Amex facility the course of trading Phlx options.4 Amex procedures respecting the is operational. The proposals are Further, like members, with respect to admission and qualification of members intended to enable Amex option the liability provisions of Phlx By-Law to trade on the Amex, for example, will products to resume trading when the Article XII, Section 12–11, Use of be deemed to satisfy Phlx Rules 901 and U.S. markets open, as well as to Facilities of Exchange (Phlx), the Phlx’s 1014(b) regarding registration of ROTs.8 accommodate Amex members. liability to Amex TAPs would be Notwithstanding the above, the Phlx Amex limited.5 may determine to impose or waive However, Amex TAPs will not be certain training requirements, including The Amex, pursuant to Rule 19b–4 of eligible to vote, serve on committees or the use of Phlx technology or equipment the Act, as amended, requests otherwise participate in Phlx and Phlx rules, such as those contained emergency authorization to allow governance, apply for specialist in the Phlx Rule 620. The Phlx also certain options traded at the Amex to be privileges,6 nor act as floor officials.7 proposes that Amex TAPs who sigh the traded on the Phlx, and for Amex For purposes of Phlx Rule 104, which form thereby bind their member specialists, registered options traders provides, in pertinent part, that no organization to Phlx requirements and (‘‘ROTs’’) and floor brokers to trade on member shall, while on the floor, make jurisdiction as well, consistent with the floor of the Phlx. a transaction with any non-member, fundamental principles of agency law. Phlx Amex TAPs shall not be considered Amex TAPs must also de-register when ‘‘non-members.’’ Amex TAPs will not discontinuing their Amex TAP status The Phlx, pursuant to Rule 19b–4 of have access to, or the ability to act as, using the appropriate form.9 Lastly, on the Act, proposes to temporarily permit members respecting Phlx options that this form, Amex TAPs shall designate qualified Amex members who are are not Phlx/Amex options. Lastly, an OCC-member clearing firm. The Phlx registered at the Amex as floor brokers, Amex TAPs’ physical access to the Phlx is also proposing that clearing firms that registered option traders (‘‘ROTs’’) or are not Phlx members will be deemed to specialists (‘‘Amex Temporary Access 3 The Phlx intends to trade all non-Phlx Amex have satisfied, and the Phlx will waive Persons’’ or ‘‘TAPs’’) to access the Phlx and Phlx/Amex options, but may not, taking into specific compliance with, in respect of options trading floor on a temporary account space, safety, licensing, operational and accounts of Amex TAPs trading on the basis to trade the following options on technological considerations. 4 These include, but are not limited to, Phlx Rule Phlx, rules governing or applying to 10 the terms specified below: (i) Phase 1— 104, 1000, et seq. clearing firms. non-Phlx Amex options, which include, 5 Specifically, that provision states that the Phlx as of the close of trading on September shall not be liable for any damages sustained by a 8 The Phlx believes that this is consistent with 10, 2001, (a) equity options traded only member or a member organization arising out of the prior Commission-approved practices respecting on the Amex; (b) equity options traded use or enjoyment by such member or member members on one exchange trading on the facilities organization of the facilities afforded by Phlx to of another exchange. See Securities Exchange Act on the Amex and another options members for the conduct of their business. Release No. 40088 (June 12, 1998), 63 FR 33426 exchange, but not the Phlx; and (c) 6 The extent to which Amex specialists currently (June 18, 1998) (SR–Phlx–98–25). index options traded only on the Amex; acting as specialists in non-Phlx Amex options that 9 The Phlx has determined that de-registration and (ii) Phase 2—equity options that are are traded on the Phlx under Phase 1 will continue may be by any written submission to the Phlx’s to act as specialists is discussed below. Membership Services Department. traded on both the Phlx and Amex 7 Amex TAPs would, however, be subject to the 10 See, e.g., Phlx Rule 1000(A)(3). The Phlx is also (‘‘Phlx/Amex options’’) as of the close of rulings of Phlx floor officials pursuant to Phlx rules, seeking agreements from non-Phlx member clearing trading on September 10, 2001. including Phlx Rule 124 and appeals therefrom. firms whereby the clearing firm agrees and
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Because Amex TAPs would be trading been reached between the Phlx and the for the proposed rule changes and on the Phlx options floor using Phlx Amex and are proposed herein: (i) Non- discussed any comments they received technology in the regular Phlx trading Phlx Amex options normally traded by on the proposed rule changes. The text crowd pursuant to Phlx rules, the rules Amex specialist units whose firms or of these statements may be examined at (including by-laws, Certificate of affiliates have a Phlx specialist unit will the places specified in Item III below. Incorporation, floor procedure advices, be traded by the same firm’s Phlx The Exchanges have prepared policies and practices, all as specialist unit; (ii) non-Phlx Amex summaries set forth in Sections A, B, supplemented and modified by this options normally traded by Amex and C below, of the most significant proposed rule change) of the Phlx specialist units whose firms or affiliates parts of such statements. would govern such activity.11 For have no Phlx specialist unit will be A. Self-Regulatory Organizations’ instance, the trading rules applicable to traded by the Phlx specialist unit Statements of the Purpose of, and Phlx ROTs would apply to Amex TAPs designated by that Amex specialist; and Statutory Basis for the Proposed Rule acting as ROTs on the Phlx, including (iii) non-Phlx Amex options normally Changes the two-sided market making traded by Amex specialist units whose obligations of Phlx Rule 1014. The Phlx firms or affiliates have no Phlx 1. Amex specialist units, and are not designated intends to surveil the Phlx trading The purpose of the Amex’s proposed by that Amex specialist, will be activity of Amex TAPs trading on the rule change is to permit Amex members, allocated, as of September 14, 2001, to Phlx under this proposal, as it surveils on a temporary basis, to trade Amex Phlx specialist units in accordance with other Phlx options trading. To the extent options at the Phlx. As proposed, Amex that Amex TAPs request the installation Phlx Rules 500–526. Further, non-Phlx Amex options will be deemed to have members who are duly qualified as of equipment or communication lines, specialists, ROTs and floor brokers will for purposes of Phlx Rule 606, the Phlx been duly allocated to qualified specialists, subject to the written be temporary members of the Phlx staff (in lieu of The Options Committee) known as ‘‘Temporary Access Persons’’ must approve such. representation by a designated, authorized Amex official that each non- or ‘‘TAPs.’’ The arrangement for trading Non-Phlx Amex options would be Amex options by Amex TAPs at the deemed eligible for listing on the Phlx, Phlx Amex option has been allocated on the Amex in compliance with Amex Phlx would be limited to those options subject to the written representation by traded on the Amex as of the close of a designated, authorized Amex official rules governing qualifications of specialists and allocation of options to business on September 10, 2001, which that each non-Phlx Amex option are the following: (1) Multiply-traded proposed to be listed and traded on the Amex specialist units. Accordingly, Amex specialists will be deemed to options that are traded on both the Phlx meets Amex listing and Amex and Phlx; (2) multiply-traded maintenance standards. The Phlx have satisfied, and the Phlx will waive specific compliance with, Phlx rules options traded on the Amex but not hereby requests approval, as of currently traded on the Phlx; (3) equity September 14, 2001, for a temporary governing qualification of specialists. With respect to fees, the Phlx intends options solely traded on the Amex; and listing standard whereby options listed (4) index options only traded on the on Amex (and not the Phlx) as of to impose its options transaction charges, both equity option and index Amex. September 10, 2001 shall be eligible for With respect to all of the options listing on the Phlx. Non-Phlx Amex option, where applicable, on trades by Amex TAPs. For instance, Amex TAPs indicated above, Amex specialists and options will be deemed to have ROTs that expect to trade on the Phlx satisfied, and the Phlx will waive trading as ROTs would be subject to the option transaction/comparison charges will serve as Phlx ROTs in the trading specific compliance with, any other crowd on the floor of the Phlx. Amex applicable Phlx rules governing options applicable to Phlx ROTs under this 13 specialists that are dual members of listing and maintenance.12 Non-Phlx proposal. Amex TAPs acting as floor brokers will be charged with Phlx fees both the Amex and Phlx will continue Amex options subject to delisting (and to trade as specialists in their assigned thus, ineligible for the addition of new applicable to floor brokers (floor brokerage assessment) respecting all options through their affiliated strike prices and new expirations) at the specialist unit at the Phlx. Moreover, it time they are listed on the Phlx, would trades. Phlx members and member organizations may not apply fees paid is expected that Amex floor brokers will be deemed eligible for listing, subject to by Amex TAPs who are associated with be permitted to act as floor brokers on closing transactions only in those series Phlx member organizations to their the Phlx for those options traded on the with open interest. $1,000 monthly credit.14 The Phlx has Amex as of the close of business on Phlx/Amex options will be traded by September 10, 2001 and that will now the Phlx specialist unit assigned to that determined not to impose its dues, technology fee and facilities related fees trade on the Phlx. The Phlx will provide option. With respect to how specialists trade reporting, quote reporting and will be assigned to trade non-Phlx Amex (e.g., post/booth space) due to the emergency and temporary nature of the surveillance in connection with the options, the following agreements have situation. trading of options by Amex TAPs on the Phlx as would otherwise be the case for undertakes to comply with all applicable Phlx rules II. Self-Regulatory Organizations’ in respect of Phlx/Amex options and/or non-Phlx options trading of Phlx options. Statements of the Purpose of, and The Phlx proposes to impose Amex options for the account of Amex TAPs as if Statutory Basis for, the Proposed Rule the clearing firm were a member of the Phlx. transaction-based fee charges on all 11 The Phlx notes that Amex TAP trades shall be Changes options transactions of Amex TAPs. deemed Phlx trades, including for purposes of trade In its filing with the Commission, the Amex floor brokers trading on the Phlx reporting, clearing and the Plan for Reporting of Consolidated Options Last Sale Reports and Exchange included statements as TAPs will be charged the fees by the Quotation Information (‘‘OPRA Plan’’). concerning the purpose of and the basis Phlx applicable to current Phlx floor 12 Amex will enter into an agreement with Phlx brokers. concerning the Exchanges’ respective obligations 13 The Phlx intends to bill Amex TAPs through For purposes of this temporary access under the proposal; Amex will, inter alia, agree to their clearing firms. to the Phlx options trading floor, Amex be responsible for maintenance studies and 14 See Securities Exchange Act Release No. 44292 maintaining listing standards on all Non-Phlx Amex (May 11, 2001), 66 FR 27715 (May 18, 2001) (SR– members will be Phlx members options. Phlx–2001–49). identified as TAPs, and, therefore,
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subject to Phlx rules and regulations, price, position and exercise limits, and respect to arbitration jurisdiction, Phlx including all options trading rules. firm quote and Auto-X guarantees. The arbitration rules will apply. However, Amex TAPs will not be method of submission of orders to the The Phlx is requesting immediate permitted to participate in the corporate Phlx trading floor continues to be the accelerated approval of the proposal in governance of the Phlx, including, but use of the AUTOM System (through a order to promptly enable Amex TAPs to not limited to, the right to vote or serve Phlx member) or a floor broker, begin trading on the Phlx, which is as floor officials. although the floor broker could be an anticipated to be a 9:30 A.M. on As detailed in the Phlx proposed rule Amex floor broker/TAP.17 The Phlx also Monday, September 17, 2001. In change, Amex TAPs who execute the anticipates that Amex TAPs may require addition to the immediacy of the acknowledgement form and conduct support staff, such as trading floor situation, the Phlx believes that Amex business at the Phlx will be subject to clerks, who would be permitted under TAP access would only remain in effect the jurisdiction of the Phlx as well as specified terms. Clerks would be until the Amex facility is restored and the Amex. Therefore, Amex members required to register (and de-register) 18 resumes such options trading, which is will be qualified members of both the on a similar form, identifying the anticipated to be several days, although Amex and the Phlx, although, primary responsible Amex market makers and it is difficult to predict the timing of the jurisdiction for trading on the options Amex member organization.19 resolution of the situation in New York floor of the Phlx will reside with the Operationally, the Phlx intends to described above. Phlx. However, the Amex has not handle Amex market maker quotes and For these reasons, the Phlx believes completely relinquished jurisdiction trades like other Phlx quotes and trades, that the proposed rule change is over its own members. For example, the including quote and trade reporting and consistent with Section 6 of the Act,21 Phlx may prefer that the Amex dissemination via OPRA. The Phlx in general, and in particular, with investigate and bring an enforcement intends to establish appropriate account section 6(b)(5) of the Act,22 because it action against an Amex member for number processing for Amex TAP would promote just and equitable violations of Phlx rules in connection trades. The Phlx will provide general principles of trade, remove with options trading at the Phlx. notice as well as an educational session impediments to and perfect the For these reasons, the Amex believes for Amex TAPs. Respecting Phlx/Amex mechanism of a free and open market that its proposed rule change is options, Amex TAPs will trade with and a national market system, and foster consistent with Section 6 of the Act,15 Phlx ROTs and other Phlx members in cooperation and coordination with in general, and with Section 6(b)(5) of the respective Phlx options trading persons engaged in regulating, clearing, the Act,16 specifically, in that it is crowds. settling, processing information with designed to perfect the mechanisms of With respect to other regulatory respect to, and facilitating transactions a free and open market and the national aspects of the proposals, in addition to in securities, by providing an options market system, protect investors and the surveillance, the Phlx intends to facility for Amex members. pubic interest and promote just and exercise enforcement jurisdiction over equitable principles of trade by Amex TAPs trading options on the Phlx. B. Self-Regulatory Organizations’ members. However, the Phlx and the Amex have Statements on Burden on Competition agreed that the Phlx may request the 2. Phlx The Exchanges do not believe that the Amex to assume enforcement proposed rule changes will impose any The purpose of the Phlx proposed jurisdiction upon request by Phlx, as inappropriate burden on competition. rule change is to accommodate Amex well as incremental costs associated TAPs and to accommodate trading in with surveillance, investigations and C. Self-Regulatory Organizations’ non-Phlx Amex options, particularly enforcement, under this proposal. The Statements on Comments on the those options traded only on the Amex Amex has also agreed to cooperate with Proposed Rule Changes Received From that would otherwise temporarily have the Phlx by providing information to the Members, Participants, or Others no trading facility, on a temporary basis, Phlx respecting Amex TAPs. Because No comments were either solicited or during a crisis in the nation’s financial Amex TAPs will continue to be Amex received by Amex or Phlx. markets. The proposal is intended to members and subject to Amex rules provide access to certain options respecting such membership, Amex III. Solicitation of Comments products previously traded by these financial responsibility rules, including Interested persons are invited to Amex members on the Amex, pending margin provisions, will continue to submit written data, views and restoration of the Amex’s facility. apply.20 Accordingly, the Amex has arguments concerning the foregoing, The Phlx’s proposal is tailored to agreed to retain examination including whether the proposed rule permit access to Amex TAPs seeking to jurisdiction over Amex TAPs, including changes are consistent with the Act. continue their livelihood and make the daily net capital review. With Persons making written submissions markets, as well as provide a should file fix copies thereof with the marketplace for options that trade only 17 If the Phlx permits an Amex TAP to act as a Secretary, Securities and Exchange on the Amex. It is with respect to these floor broker on the Phlx, the Phlx is not obligated Commission, 450 Fifth Street, NW., to provide trading floor or other physical space, or options, in particular, that this proposal technology, including floor broker order entry Washington, DC 20549–0609. Copies of is intended to perfect the mechanism of terminals, to such floor brokers. the submissions, all subsequent a free and open market and a national 18 The Phlx has determined the de-registration amendments, all written statements market system. Because the Phlx trading may be by any written submission to the Phlx’s with respect to the proposed rule facility is being utilized, the Phlx Membership Services Department. changes that are filed with the 19 The Phlx, in its sole discretion, may limit the technology and trading rules would number of clerks and Amex TAPs granted access to Commission, and all written apply to both Phlx/Amex options and the Phlx options floor due to space and safety communications relating to the non-Phlx Amex options, including concerns. proposed rule changes between the minimum trading increments, strike 20 As stated above and in the certification form, Commission and any person, other than Amex membership-related rules would apply, because Phlx is waiving its rules governing status 15 15 U.S.C. 78f. as a Phlx member. Admissions procedures is 21 15 U.S.C. 78f. 16 15 U.S.C. 78f(b)(5). another example of such a rule. 22 15 U.S.C. 78f(b)(5).
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those that may be withheld from the cooperation and coordination with higher level of liquidity in those public in accordance with the persons engaged in regulating, clearing, products than would be available provisions of 5 U.S.C. 552, will be settling, processing information with without permitting Amex members available for inspection and copying in respect to, and facilitating transactions temporary access to the Phlx. the Commission’s Public Reference in securities, to remove impediments to It Is Therefore Ordered, pursuant to Room. Copies of the filings will also be and perfect the mechanism of a free and section 19(b)(2) of the Act,26 that the available for inspection and copying at open market and a national market proposed rule changes (SR–Amex– the principal offices of Amex and Phlx, system, and, in general, to protect 2001–80 and SR–Phlx–2001–86) are respectively. All submissions should investors and the public interest. hereby approved on an accelerated refer to File Nos. SR–Amex-2001–80 The Commission believes that the basis. and SR–Phlx-2001–86 and should be arrangements between the Amex and October 12, 2001. Phlx to permit the trading of Amex For the Commission, by the Division of products on the Phlx by Amex members Market Regulation, pursuant to delegated authority.27 IV. Commission Findings and Order will ensure that all Amex options Granting Accelerated Approval of the products will be available for trading by Margaret H. McFarland, Proposed Rule Changes market participants when trading Deputy Secretary. The Commission notes that the resumes in the U.S. markets. The [FR Doc. 01–23524 Filed 9–20–01; 8:45 am] proposed rule changes were submitted Commission also believes that the BILLING CODE 8010–01–M in response to the emergency situation arrangements allowing Amex specialists that resulted from the September 11, and Amex ROTs to make markets on the 2001 attacks on the World Trade Center Phlx in the options for which they made SECURITIES AND EXCHANGE in New York City. On September 11, markets on Amex should ensure that COMMISSION 2001, the U.S. equities and options Amex options have a similar level of markets determined not to open in light liquidity as was the case on September [(Release No. 34–44807; File No. SR–Amex– of the attacks that morning. The U.S. 10, 2001. Further, the Commission 2001–67)] equities and options markets remained believes that permitting Amex floor closed throughout the remainder of that brokers to act as floor brokers in the Self-Regulatory Organizations; Notice week. As a result of the attacks, the options for which they acted as floor of Filing of Proposed Rule Change by Amex facilities were damaged and, at brokers on Amex should ensure that the the American Stock Exchange LLC to this time, cannot be reopened. The orders directed to Phlx for Amex Codify Current Audit Trail and Trade Amex and Phlx have worked to options are handled efficiently. The Comparison Requirements and to accommodate the opening of trading of Commission considers to be appropriate Make Other Technical Amendments to Amex options and to accommodate the arrangement whereby the Phlx will the Exchange’s Audit Trail Rules trading by Amex members.23 be responsible for ensuring compliance September 17, 2001. The Commission notes that Amex of Amex members trading on the Phlx TAPS that are granted temporary access floor with Phlx trading rules, while Pursuant to Section 19(b)(1) of the to the Phlx will only be permitted to Amex will be responsible for ensuring Securities Exchange Act of 1934 1 2 trade on the Phlx those securities that that its members comply with member (‘‘Act’’) and Rule 19b-4 thereunder, the TAP traded on the Amex, and to act qualification and financial notice is hereby given that on August in those capacities that are authorized responsibility rules. In this regard, the 28, 2001, the American Stock exchange by Phlx and that are comparable to Commission notes that it is important LLC (‘‘Amex’’ or ‘‘Exchange’’) filed with capacities that the TAP has been that the Amex and the Phlx continue to the Securities and Exchange authorized to act on the Amex. closely coordinate and cooperate to Commission (‘‘Commission’’) the The Commission finds that the ensure that Amex members temporarily proposed rule change as described in proposed rule changes are consistent trading on the Phlx are adequately Items I, II, and III below, which Items with the requirements of the Act and the surveilled and that their financial have been prepared by the Exchange. rules and regulations thereunder condition is monitored. The Commission is publishing this applicable to a national securities The Commission is satisfied that the notice to solicit comments on the exchange.24 Specifically, the arrangements worked out between proposed rule change from interested Commission finds that the proposed Amex and Phlx will enable continuous, persons. rule changes are consistent with section liquid markets to be maintained for I. Self-Regulatory Organization’s 6(b)(5) of the Act,25 which requires, :Amex options in an exchange Statement of the Terms of Substance of among other things, that the rules of an environment while maintaining the the Proposed Rule Change exchange be designed to foster usual investor protection safeguards. This is especially important in light of The Exchange proposes to amend 23 The Commission notes that the Phlx and the the upcoming options expiration on Amex Rule 719: (1) To codify current Amex have, of necessity, had discussions, September 21, 2001. audit trail and trade comparison understandings and agreements concerning the listing of non-Phlx Amex options on the Phlx in The Commission finds good cause for requirements, (2) to clarify that Amex order to facilitate the establishment of the approving the proposed rule changes Rule 719 applies to all Amex securities, arrangements described in this Order outside the prior to the thirtieth day after the date and (3) to delete rule language to the framework permitted by the Plan for the Purpose of of publication of the notice of filing in implementation of T+1 comparison. Developing and Implementing Procedures Designed to Facilitate the Listing and Trading of the Federal Register. The Commission The text of the proposed rule change Standardized Options Submitted Pursuant to believes that it is necessary to approve appears below. New text is in italics; Section 11A(a)(3)(B) of the Securities Exchange Act the proposed rule changes on an deletions are in brackets. of 1934. This Order approves such discussions, accelerated basis to provide a trading understandings, and agreements. venue for Amex options, which market 26 24 In approving these proposals, the Commission 15 U.S.C. 78s(b)(2). has considered their impact on efficiency, participants would otherwise not be 27 17 CFR 200.30–3(a)(12). competition, and capital formation. 15 U.S.C. 78c(f). able to trade until Amex’s New York 1 15 U.S.C. 78s(b)(1). 25 15 U.S.C. 78f(b)(5). facilities are reopened, and to provide a 2 17 CFR 240.19b–4.
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