[Federal Register Volume 60, Number 2 (Wednesday, January 4, 1995)]
[Notices]
[Pages 518-519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35147; File No. SR-NYSE-94-39; SR-Phlx-94-29; SR-PSE-
94-34; SR-BSE-94-15; SR-CHX-94-28; SR-NASD-94-67]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by New York Stock Exchange, Inc., Philadelphia Stock Exchange,
Inc., Pacific Stock Exchange, Inc., Boston Stock Exchange, Inc.,
Chicago Stock Exchange, Inc., and National Association of Securities
Dealers, Inc. Relating to Short Interest Reporting Requirements
December 23, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on
October 27, 1994, the New York Stock Exchange, Inc., Philadelphia Stock
Exchange, Inc., Pacific Stock Exchange, Inc., Boston Stock Exchange,
Inc., Chicago Stock Exchange, Inc., and National Association of
Securities Dealers, Inc. (the ``SROs'')\1\ filed with the Securities
and Exchange Commission (``Commission'') the proposed rule change as
describe in Items I, II and III below, which Items have been prepared
by the self-regulatory organizations. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons.
\1\The self-regulatory organizations listed herein will
collectively be referred to as the (``SROs'').
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
The proposed rule changes consist of (1) revisions to the rules of
the SROs with existing short interest reporting requirements, and (2)
adoption of short interest reporting rules for the SROs currently
without any such requirement. All of the proposed rule changes will
require members and member organizations of the SROs to report short
interest positions to the SROs if the particular SRO is the designated
examining authority for that member.\2\
\2\The NASD, however requires reporting for all members of their
short positions not otherwise reported to another SRO, irrespective
of its DEA status. In doing so, the NASD seeks to ensure that it
receives short position reporting for all NASDAQ securities.
Conversation with Suzanne Rothwell, NASD, and Amy Bilbija,
Commission, dated December 21, 1994.
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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 SROs included statements
concerning the purpose of and basis for the proposed rule change and
discussed any [[Page 519]] comments they received on the proposed rule
changes. The text of these statements may be examined at the places
specified in Item IV below. The SROs have 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
The current NYSE and NASD rules require clearing member firms to
report positions resulting from short sales, as that term is defined in
Rule 3b-3 of the Securities Exchange Act of 1934, in Exchange listed
securities and, with respect to the NASD, securities included in the
NASDAQ System. Such reports are required on a monthly basis, submitted
via electronic transmission of the data through the Securities Industry
Automation Corporation (``SIAC''). The SROs utilize such data, in
general, to surveil market activity. In addition, the NYSE publishes a
monthly release of short interest information as a service to listed
companies, the investing public, market professionals and other
interested parties.
The SROs have worked closely with each other as members of the
Inter-Market Surveillance Group (``ISG''), a group which includes
representatives of every U.S. securities self-regulatory organization,
to address problems that reach across marketplaces. ISG members have
identified uniform short position reporting as an important
surveillance tool that can be utilized to good effect in monitoring
possible anomalous trading situations. Each member of the ISG is
planning to adopt similar provisions.
Generally, the SROs propose to require all members to report short
interest positions to the SRO that is the designated examining
authority (``DEA'') for that member. In addition, most SROs will
require those members for which the SRO is not the DEA to report to the
SRO which is its DEA, unless that SRO does not have a reporting
requirement. In cases where no reporting is required by the DEA, the
member would be required to report short position information to the
SRO where it is a member irrespective of its non-DEA status.
Reports to the SROs would primarily include listed and registered
securities, not otherwise reported to another SRO. Reporting would be
required at such times as designated by the SROs. Finally, most rules
would clarify that both proprietary and customer positions must be
reported.
The full text of each SRO's proposed rule change is available at
the Commission's Public Reference Room and at the offices of each
respective SRO.
2. Statutory Basis
The SROs believe that the basis under the Securities Exchange Act
of 1934 (the ``Act'') for the proposed rule changes is the requirement
under Section 6(b)(5) and 15A(b)(6), as applicable, that an SRO 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 rule changes are consistent with these
objectives in that they would enhance the Exchanges' regulatory and
surveillance capabilities with respect to short interest reporting,
augment market transparency for certain securities, enable investors to
make more informed decisions, and provide greater disclosure for
regulatory purposes.
B. Self-Regulatory Organization's Statement on Burden on Competition
The SROs do not believe that the proposed rule changes 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 SROs have neither solicited nor received written comments on
the proposed rule changes.
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, 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. Sec. 552, will be available for inspection and copying at
the Commission's Public Reference Section, 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of such filing will also be available
for inspection and copying at the principal office of each SRO. All
submissions should refer to File No. SR-NYSE-94-39; SR-Phlx-94-29; SR-
PSE-94-34; SR-BSE-94-15; SR-CHX-94-28; SR-NASD-94-67, as applicable,
and should be submitted by January 25, 1995.
For the Commission, by the Division of Market Regulations,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-28 Filed 1-3-95; 8:45 am]
BILLING CODE 8010-01M