[Federal Register Volume 62, Number 122 (Wednesday, June 25, 1997)]
[Notices]
[Pages 34336-34337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16576]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38745; File No. SR-NYSE-97-21]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the New York Stock Exchange, Inc. Relating to Trading
Differentials for Equity Securities
June 18, 1997.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), \1\ notice is hereby given that on June 16, 1997, the New
York Stock Exchange, Inc. (``NYSE'' 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 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. 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 amendments to Exchange Rules
62, 95.30, 118, 127 and 440B to provide flexibility in determining
minimum trading variations.\2\
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\2\ This proposal seeks permanent approval of the procedures
contained in File No. SR-NYSE-97-20. Securities Exchange Act Release
No. 34-38744 (June 18, 1997) (granting temporary accelerated
approval).
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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 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 IV 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
Exchange Rule 62 currently provides fixed minimum trading
variations for stocks traded on the Exchange. For example, the rule
currently states that ``Bids or offers in stocks above one dollar per
share shall not be made at a less variation than \1/8\ of one dollar
per share.'' In order to provide greater flexibility to adjust trading
variations as may be appropriate, the Exchange is proposing to amend
Rule 62 so that the minimum trading variation may be changed from time
to time.
This increased flexibility would allow the Exchange to determine
trading variations on an expedited basis, without undergoing the delays
inherent in the regulatory approval process. This would put the
Exchange in a comparable regulatory position with respect to minimum
trading variations with other exchanges which are able to change
variations at any time.
In addition, the amendment to Rule 62 will provide flexibility so
that the Exchange could permit its members to trade at increments
smaller than NYSE-established trade variations in order to match other
markets' bids or offers for the purpose of preventing Intermarket
Trading System (``ITS'') trade-throughs. For example, assume that the
established minimum trading variation is one-sixteenth of a dollar, and
the best bid on the Exchange for a particular stock is 10, but there is
a bid for that stock on the ITS AT 10\1/32\. The Exchange specialist,
or broker in the Crowd with a ``not held'' order, could execute a
marketable limit order or market order to sell at 10\1/32\ in order to
match the ITS bid. However, the specialist could not accept an order
with a limit of 10\1/32\ since it is not the minimum variation at which
trading is effected on the Exchange.
The Exchange intends initially to set a minimum variation of one-
sixteenth of one dollar.
In addition to Rule 62, several other Exchange rules incorporate
specific references to minimum trading variations. These rules, viz.,
Rule 95.30, Rule 118, Rule 127, and Rule 440B, would be amended to
remove references to specific minimum trading variations of one-eighth
of one dollar.
2. Statutory Basis
The Exchange believes the proposed rule change is consistent with
Section
[[Page 34337]]
6(b) \3\ of the Act in general and furthers the objectives of Section
6(b)(5) \4\ in particular in that it is 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.
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\3\ 15 U.S.C. 78f(b).
\4\ 15 U.S.C. 78f(b)(5).
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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.
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. 552, will be available for inspection and copying at the
Commission's Public Reference Room, 450 Fifth Street, N.W., Washington,
D.C. 20549. Also, copies of such filing will be available for
inspection and copying at the principal office of the NYSE. All
submissions should refer to File No. SR-NYSE-97-21 and should be
submitted by July 16, 1997.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\ 17 C.F.R. 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-16576 Filed 6-24-97; 8:45 am]
BILLING CODE 8010-01-M