[Federal Register Volume 61, Number 238 (Tuesday, December 10, 1996)]
[Notices]
[Pages 65099-65100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31334]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38015; File No. SR-NYSE-96-32]
Self-Regulatory Organizations; New York Stock Exchange,
Incorporated; Notice of Filing of Proposed Rule Change Relating to the
Exchange's Policy on Tape Indications
December 3, 1996.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on November 26, 1996, 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
[[Page 65100]]
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 NYSE, pursuant to Rule 19b-4 of the Act,\2\ proposes to amend
the Exchange Policy on Indications, Openings and Reopenings, which will
be issued as an Information Memorandum.
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\2\ 17 CFR 240.19b-4.
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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
Indications are price ranges published on the tape before the
opening or during a trading halt to display the probable price range in
which a stock will open or reopen.
The Exchange's policy on dissemination of tape indications
currently requires a minimum of 5 minutes to elapse between the first
indication and the opening or reopening of a stock. In addition, when
multiple indications are used, a minimum of 10 minutes must elapse
after the last indication when it does not overlap the prior
indication; a minimum of 5 minutes must elapse after the last
indication when it overlaps the prior indication. In all cases, a
minimum of 15 minutes must elapse between the first indication and the
opening or reopening of a stock.
The Exchange is proposing that these minimum time periods before
opening or reopening a stock be compressed from 15 to 10 minutes after
the first indication; and to 5 minutes after the last indication,
regardless of whether it overlaps the prior indication, provided that a
minimum of 10 minutes elapse between the first indication and the
opening or reopening of a stock. The Exchange believes that a minimum
time period of 10 minutes for dissemination has proven sufficient in
other contexts, such as the publication of imbalances of 50,000 shares
or more of market-on-close orders on trading days other than expiration
days.
Over the years, in developing procedures for openings, the Exchange
has focused on providing a balance between timeliness and
appropriateness of price, i.e., achieving a price that reflects an
appropriate equilibrium of buying and selling interest at the time.
Since current procedures were formulated, the speed of communications
has increased, meaning that relevant market information can be
disseminated and responded to very quickly. The proposed rule change
would shorten the time period for indications, thereby allowing the
opening or reopening of a stock in a more expeditious fashion, while
still providing sufficient time for appropriate pricing of orders.
The revised procedures for tape indications strike an appropriate
balance between preserving the price discovery process while providing
timely opportunities for investors to participate in the market.
2. Statutory Basis
The proposed rule change is consistent with Section 6(b)(5) of the
Act 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.
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, 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 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 the Exchange. All submissions should
refer to File No. SR-NYSE-96-32 and should be submitted by December 31,
1996.
For the Commission, by the Division of market Regulation,
Pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-31334 Filed 12-9-96; 8:45 am]
BILLING CODE 8010-01-M
