[Federal Register Volume 59, Number 135 (Friday, July 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-17253]
[[Page Unknown]]
[Federal Register: July 15, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34343; File No. SR-NYSE-94-3]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the New York Stock Exchange, Inc. Relating to the Adoption of
New Rule 123A.46
July 11, 1994.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on February 22, 1994, 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.
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\1\15 U.S.C. Sec. 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 a new Rule 123A.46 pertaining
to members' representation of multiple orders. Rule 123A.46 would
require members and member organizations (including ``upstairs''
trading personnel) to inform customers if they are representing orders
for more than one customer at the same time, on the same side of the
market, if the orders may not receive an execution in time priority of
receipt, or may not receive an equal or proportional split.
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. The text of these statements may be examined at
the places specified in Item IV below and is set forth in Sections (A),
(B) and (C) below.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange is proposing adoption of new Rule 123A.46 to ensure
that customers are informed, in a timely manner, of the circumstances
under which their orders are being represented. Under this rule,
members and member organizations (including ``upstairs'' trading
personnel) would be required to inform each customer if they are
representing orders for more than one customer at the same time, on the
same side of the market, if the orders may not receive an execution in
time priority of receipt, or may not receive an equal or strictly
proportional split based upon the size of the orders. For example, if a
broker was representing three not held orders to buy stock, one for
100,000 shares, and two for 50,000 shares each, and the broker executed
a trade for 12,000 shares, the broker would be permitted to (1)
allocate all 12,000 shares to the customer who entered the order first
(time priority), (2) split the trade equally by giving 4,000 shares to
each customer, or (3) split the trade proportionally to the customer
orders, i.e., 6,000 shares, 3,000 shares and 3,000 shares. Under these
circumstances, no disclosures would be required. However, if the
execution would be split in any other manner, this information would
have to be disclosed to customers prior to multiple orders being
represented.
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. The
proposed adoption of Rule 123A.46 is consistent with these objectives
in that it will ensure that customers are informed in a timely manner
of the circumstances under which their orders are being represented.
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 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-94-3 and should be
submitted by August 5, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-17253 Filed 7-14-94; 8:45 am]
BILLING CODE 8010-01-M
