[Federal Register Volume 59, Number 135 (Friday, July 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17253]


[[Page Unknown]]

[Federal Register: July 15, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34343; File No. SR-NYSE-94-3]

 

Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. Relating to the Adoption of 
New Rule 123A.46

July 11, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on February 22, 1994, the New 
York Stock Exchange, Inc. (``NYSE'' 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 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. Sec. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change consists of a new Rule 123A.46 pertaining 
to members' representation of multiple orders. Rule 123A.46 would 
require members and member organizations (including ``upstairs'' 
trading personnel) to inform customers if they are representing orders 
for more than one customer at the same time, on the same side of the 
market, if the orders may not receive an execution in time priority of 
receipt, or may not receive an equal or proportional split.

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. The text of these statements may be examined at 
the places specified in Item IV below and is set forth in Sections (A), 
(B) and (C) below.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange is proposing adoption of new Rule 123A.46 to ensure 
that customers are informed, in a timely manner, of the circumstances 
under which their orders are being represented. Under this rule, 
members and member organizations (including ``upstairs'' trading 
personnel) would be required to inform each customer if they are 
representing orders for more than one customer at the same time, on the 
same side of the market, if the orders may not receive an execution in 
time priority of receipt, or may not receive an equal or strictly 
proportional split based upon the size of the orders. For example, if a 
broker was representing three not held orders to buy stock, one for 
100,000 shares, and two for 50,000 shares each, and the broker executed 
a trade for 12,000 shares, the broker would be permitted to (1) 
allocate all 12,000 shares to the customer who entered the order first 
(time priority), (2) split the trade equally by giving 4,000 shares to 
each customer, or (3) split the trade proportionally to the customer 
orders, i.e., 6,000 shares, 3,000 shares and 3,000 shares. Under these 
circumstances, no disclosures would be required. However, if the 
execution would be split in any other manner, this information would 
have to be disclosed to customers prior to multiple orders being 
represented.
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. The 
proposed adoption of Rule 123A.46 is consistent with these objectives 
in that it will ensure that customers are informed in a timely manner 
of the circumstances under which their orders are being represented.

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

    The Exchange does not believe that the proposed rule change will 
impose any burden on competition that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    The Exchange has neither solicited nor received written comments on 
the proposed rule change.

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 NW., Washington, DC 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 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 NYSE. All 
submissions should refer to File No. SR-NYSE-94-3 and should be 
submitted by August 5, 1994.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-17253 Filed 7-14-94; 8:45 am]
BILLING CODE 8010-01-M