[Federal Register Volume 59, Number 13 (Thursday, January 20, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-1340]
[[Page Unknown]]
[Federal Register: January 20, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33475; File No. SR-NYSE-93-45]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the New York Stock Exchange, Inc. Relating to the Exchange's
Specialist Combination Review Policy
January 13, 1994.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''), 15 U.S.C. 78S(b)(1), notice is hereby given that on December
3, 1993, 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.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change consists of the Exchange's Specialist
Combination Review Policy. The full text of the Policy is available at
the NYSE and at the Commission.
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
The purpose of the Policy is to ensure that the Exchange maintains
a uniform process for reviewing specialist unit combinations that might
result in levels of concentration that could be detrimental to the
Exchange's operation of a marketplace.
The Policy requires Exchange approval of proposed specialist unit
combinations. In any instance where a proposed combination will result
in a specialist unit accounting for more than five percent of any
``concentration measure,''\1\ as defined in the Policy, the Exchange's
Quality of Markets Committee (the ``Committee'') is required to conduct
a review of the proposed combination. This review includes an analysis
of specialist performance and market quality in the stocks subject to
the proposed combination. The Committee looks at the effects of the
proposed combination in terms of strengthening the capital base of the
new unit, minimizing the potential for financial failure of the unit
and maintaining or increasing operational efficiencies within the unit.
The Committee also considers the proposed unit's commitment to the
Exchange market and the effect of the proposed combination on overall
concentration of specialist organizations.
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\1\The concentration measures include specialist share of:
listed common stocks
the 250 most active listed stocks
total share volume of stock trading on the Exchange
total dollar value of stock trading on the Exchange.
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Where a proposed combination would result in a specialist unit
which accounts for more than ten percent of a concentration measure,
the primary consideration during the Committee's review is the effect
of the proposed combination on overall concentration of specialist
units. If the new unit accounts for more than ten percent, but less
than or equal to 155, of a concentration measure, the Policy requires
the proponents of the combination to prove, by a preponderance of the
evidence, that the proposed combination:
(i) Would not cause detrimental concentration to the Exchange and
its markets;
(ii) Would foster competition among specialist units; and
(iii) Would enhance the performance of the constituent specialist
unit and the quality of the markets in the stocks involved.
The Policy also requires the proponents of any combination greater
than ten percent, but less than or equal to 15%, to prove, by a
preponderance of the evidence, that the proposed combination, if
approved, is otherwise in the public's interest.
Where the proposed combination would result in a specialist unit
which accounts for greater than 15% of a concentration measure, the
Policy requires the proponents of the combination to provide clear and
convincing evidence of the factors stated in (i) through (iii) above.
The proponents of the combination would also be required to provide
clear and convincing evidence that the proposed combination is
otherwise in the public's interest.
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.
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 not 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 written such other 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-93-45 and should be
submitted by February 10, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-1340 Filed 1-19-93; 8:45 am]
BILLING CODE 8010-01-M
