Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, notice is hereby given that on February 7, 2000, the American Stock Exchange LLC (“Amex” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On March 10, 2000, the Exchange filed Amendment No. 1 to the proposed rule change, which supersedes and replaces entirely the initial proposal. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons, and to grant accelerated approval of the proposed rule change, as amended.
17 CFR 240.19b-4.
Amendment No. 1, which Amex filed pursuant to Section 19(b)(2) of the Act, replaces the initial proposal, which Amex filed pursuant to Section 19(b)(3)(A) of the Act. Because the fees which the Exchange intends to charge for historical research reports may be paid by non-members, the proposal is properly filed pursuant to Section 19(b)(2) of the Act. See 15 U.S.C. 78s(b)(1) and 15 U.S.C. 78s(b)(3)(A).
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
Amex proposes to establish a fee structure to provide daily share volume and other reports through the AmexTrader.com web site. Below is the text of the proposed rule change. All text is being added; there are no deletions.
Historical Research and Administrative Reports
The charge to be paid by the purchaser of separate Historical Research and Administrative Reports, shall be as follows:
(1) Daily Detailed Reports—$7 per day, per security and/or market participant for reports containing 15 fields or less. $15 per day, per security and/or market participant for reports exceeding 15 fields.
(2) Summary Level Activity Reports—$25 per report.
(3) Administrative Reports—$25 per user, per month.
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
Historical Research Reports
Amex proposes to establish a fee to provide to investors, upon request, historical research reports in electronic formats pertaining to Amex issues. Until recently, Amex has provided these reports exclusively on an ad hoc basis to customers requesting this information by telephone. Under the current system, investors contact an Amex staff member via telephone, describe the type of customized report desired, and arrange for an appropriate billing and delivery method before having the Amex staff member compile the report. Reports are issued in hard copy formats for a fee, ranging from $10-$575 depending on the number of pages the report consists of, and the amount of effort taken to prepare and process the report. The fees consist of an administration fee of $10-$150 depending on the number of pages in the report, a copy charge of $.25 per report page, and if the report is delivered via fax, a fax transmission fee of $.15 per page (faxed to one recipient) or $.40 per page (faxed to multiple recipients). The average report fee assessed is $20-$30. The Amex believes this is an inefficient and time-consuming arrangement that is both burdensome to Amex staff and an impediment to the accessibility of the information for the investor.
As the number of individual investors in today's market directing their own investment decisions has increased, the volume of requests for this information has also increased. To alleviate the demand upon staff resources and increase the quality, speed and availability of the information available to investors, Amex will develop an automated request and delivery system that will facilitate the delivery of these reports in a timely and systematic manner at a fixed price, based on a standardized pricing methodology. Investors will be able to access the reports via the Internet on the AmexTrader.com web site. Once at the proper location within the web site, the investor will choose from a list of standardized reports, input the necessary information pertaining to the desired security to market participant, and provide credit card information for payment. Once completed, the report will be sent via e-mail directly to the investor.
Credit card information will be provided utilizing a secure web site connection.
Amex proposes to provide historical research reports that fall into two categories: “Daily Detailed Reports” and “Summary Level Activity Reports.” Examples of Daily Detailed Reports include a Time and Sales Report (provides a record of media-reported trades in the selected security, indicating the reported time, price and share volume) and a Sales and Quotes Report (provides trade information and inside quote information at trade time). Summary Level Activity Reports would provide trade and/or quote information over a monthly or quarterly period.
Fees for the Daily Detailed Reports would be set on a two-tiered basis to reflect the amount of information provided and give Amex a level of flexibility in developing new reports and modifying those currently envisioned. Amex proposes to assess a fee of $7 for reports with 15 or fewer fields of information for each trading day requested. Those reports with more than 15 fields would cost $15 per trading day of information. Some reports may be available for purchase on a single-day basis, while others may be available only as multiple-day packages with a corresponding charge based on the number of days provided. Fees for Summary Level Activity Reports would be fixed at $25 per report.
Examples of fields, depending on the type of report chosen, could include reported volume, reported price, reported time, inside bid/ask, short sale indicator, etc.
For example, an investor requesting a report containing 12 fields of information for a three-trading-day period would be charged $21.
Amex believes that this pricing structure is a suitable assessment method that will facilitate the creation of an inexpensive and effective service for investors.
Administrative Reports
This second category of reports, available through AmexTrader.com, termed “Administrative Reports”, will be available to Amex member firms only.
Administrative Reports would serve to assist members in auditing their own internal systems, verifying back-end processing, and projecting monthly costs. Subscribing member firms would be charged a $25 fee per user, per month, for access to each administrative report.
After assessing the demand for this service, Amex may offer volume discounts to purchasers of multiple reports if such discounts are determined to be economically feasible.
2. Statutory Basis
Amex believes that the proposed rule change is consistent with the provisions of sections 6(b)(4) and 6(b)(5) of the Act. Section 6(b)(4) requires the equitable allocation of reasonable dues, fees and other charges among members and issuers and other persons using its facilities. Section 6(b)(5) requires rules that foster cooperation and coordination with persons engaged in facilitating transactions in securities and that are not designed to permit unfair discrimination between customers, issuers, brokers or dealers. Amex believes that this service involves the implementation of reasonable fees, assessed only to users utilizing the service, while providing beneficial information to subscribers on a non-discriminatory basis.
15 U.S.C. 78f(b)(5).
15 U.S.C. 78f(b)(5).
B. Self-Regulatory Organization's Statement on Burden on Competition
Amex does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate of the purposes of the Act, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Solicitation of Comments
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 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 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, NW, Washington DC 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-00-08 and should be submitted by April 11, 2000.
IV. Commission's Findings and Order Granting Accelerated Approval of Proposed Rule Change
The Commission has reviewed carefully the Amex's proposed rule change, as amended, and finds, for the reasons set forth below, the proposal is consistent with the requirements of Section 6 of the Act and the rules and regulations thereunder applicable to a national securities exchange. Specifically, the Commission finds that approval of the proposed rule change is consistent with Sections 6(b)(4) and (5) of the Act. Section 6(b)(4) requires the equitable allocation of reasonable fees and charges among members and other users of facilities operated or controlled by an exchange. The Commission finds that the fees which Amex has proposed for the historical research and administrative reports delineated in the proposal are reasonable, given the reliability and accessibility of the information.
15 U.S.C. 78f.
15 U.S.C. 78f(b)(4).
Furthermore, Section 6(b)(5) requires rules that foster cooperation and coordination with persons engaged in facilitating transactions in securities and that are not designed to permit unfair discrimination between customers, issuers, brokers or dealers. Because the fees which Amex proposes to charge for the specified historical research and administrative reports will be assessed only to users of the service, the Commission finds that the proposal is both non-discriminatory and reasonable. The Commission also believes that the proposal may help to foster cooperation and coordination with persons engaged in facilitating transactions in securities by providing beneficial information to subscribers on a non-discriminatory basis for a reasonable fee. In doing so, the proposal may boost investor confidence, while contributing to the integrity of the securities markets.
The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the date of publication of notice thereof in the Federal Register. Accelerated approval would afford investors the benefits to be realized under this proposal as soon as possible. Additionally, the Commission notes that the proposal is substantially similar to SR-NASD-99-70, which was noticed for the full 21-day comment period, and for which no comments were received. The Commission finds, therefore, that good causes exists, consistent with Section 19(b) and Section 6(b) of the Act, to grant acclerated approval of the proposed rule change.
Securities Exchange Act Release No. 42341 (January 14, 2000), 65 FR 3513 (January 21, 2000).
15 U.S.C. 78f(b).
It is therefore ordered, pursuant Section 19(b)(2) of the Act, that the proposed rule change be and hereby is approved on an accelerated basis.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-6951 Filed 3-20-00; 8:45 am]
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