[Federal Register Volume 63, Number 62 (Wednesday, April 1, 1998)]
[Notices]
[Page 15908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8534]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-39808; File No. SR-NYSE-98-09]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the New York Stock Exchange,
Inc. Relating to the Trading of Bonds
March 26, 1998.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Exchange Act'' or ``Act''),\1\ notice is hereby given that on March
13, 1998, 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 NYSE is proposing an interpretation of Rule 85 (``Cabinet
Dealings''). Specifically, pursuant to paragraph (b) of that rule, the
Exchange is proposing to make convertible bonds eligible for trading in
its Automated Bond System (``ABS''). Following such eligibility, all
listed bonds will trade in ABS and the NYSE will close its bond trading
Floor effective June 1, 1998.
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 85(b) provides that the NYSE can designate ``those
bonds to be dealt in by use of cabinets. * * *'' ABS, an automated
trading system, is the ``cabinet'' trading system for bonds.
Historically, only bonds that cannot convert into common stock have
traded in ABS. Bonds convertible into common stock have not been
designated as eligible for ABS; rather, they have traded on the bond
Floor. Over time, trading activity has declined on the bond Floor, and
it no longer is efficient to provide for the trading of convertible
bonds on the Floor. Thus, to provide for more economic and efficient
trading of bonds, this proposed rule change would make convertible
bonds eligible for trading in ABS under Rule 85, allowing the Exchange
to close the bond Floor. In addition, this will result in the
availability of expanded quotation information in listed bonds. The
Exchange has sufficient capacity in ABS to include these bonds in the
system.
2. Statutory Basis
The Exchange represents that the proposed rule change is consistent
with Section 6(b) of the Act,\2\ in general, and furthers the
objectives of Section 6(b)(5)\3\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to remove impediments to and
perfect the mechanism of a free and open market and a national market
system, and, in general, to protect investors and the public interest.
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\2\15 U.S.C. 78f(b).
\3\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 inappropriate burden on competition.
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
The foregoing rule change constitutes a stated policy, practice, or
interpretation with respect to the meaning, administration, or
enforcement of an existing rule and, therefore, has become effective
pursuant to Section 19(b)(3)(A) of the Act\4\ and subparagraph (e) of
Rule 19b-4 thereunder.\5\ At any time within 60 days of the filing of
the proposed rule change, the Commission may summarily abrogate such
rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in furtherance of the purposes of the Act.
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\4\15 U.S.C. 78s(b)(3)(A).
\5\17 CFR 240.19b-4.
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. 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, located at the above address.
Copies of such filing also will be available for inspection and copying
at the principal office of the NYSE. All submissions should refer to
File No. SR-NYSE-98-09 and should be submitted by April 23, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-8534 Filed 3-31-98; 8:45 am]
BILLING CODE 8010-01-M
