[Federal Register Volume 64, Number 135 (Thursday, July 15, 1999)]
[Notices]
[Page 38228]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18112]
[[Page 38228]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41598; File No. SR-NYSE-98-41]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Order Approving Proposed Rule Change and Amendment No. 1 to the
Proposal Amending Opening Imbalance Publication Procedures for
Expiration Days
July 6, 1999.
I. Introduction
On November 25, 1998, the New York Stock Exchange, Inc. (``NYSE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to amend its opening imbalance
publication procedures for expiration days.\3\ On March 22, 1999, the
Exchange filed Amendment No. 1 to the proposed rule change.\4\ The
proposed rule change, including Amendment No. 1, was published for
comment in the Federal Register on May 11, 1999.\5\ The Commission
received no comments on the proposal. This order approves the proposal,
as amended.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The term ``expiration day'' refers to the last business day
prior to the expiration or settlement of derivative products.
\4\ Letter from Donald Siemer, Director, Market Surveillance,
NYSE, to Richard Strasser, Assistant Director, Division of Market
Regulations, SEC, dated March 18, 1999 (``Amendment No. 1'').
Amendment No. 1 clarified the Exchange's opening procedures for
stocks underlying derivative index-related products on expiration
days.
\5\ Securities Exchange Act Release No. 41359 (May 3, 1999), 64
FR 25387.
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II. Description of the Proposal
The Exchange currently utilizes auxiliary opening procedures on
expiration days.\6\ Currently, the auxiliary procedures require, among
other things, that market order imbalances of 50,000 shares or more in
stocks on the Exchange's ``special stock'' list \7\ be published as
soon as practicable after 9:00 a.m. on expiration days. The Exchange
proposes to amend its auxiliary opening procedure requiring market
order imbalance publication on expiration days by eliminating the use
of the special stock list. The proposed rule change would require
publication of market order imbalances for all stocks with imbalances
of 50,000 shares or more. In addition, the proposal would permit the
publication of market order imbalances of less than 50,000 shares upon
floor official approval.\8\
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\6\ Modified opening procedures were first used on a pilot basis
for the quarterly expiration on June 19, 1987. See Securities
Exchange Act Release No. 24596 (June 16, 1987), 52 FR 23618 (June
23, 1987). These procedures were approved permanently in Securities
Exchange Act Release No. 25804 (June 15, 1988), 53 FR 23474 (June
22, 1998) (File Nos. SR-NYSE-87-11) and SR-NYSE-88-04).
\7\ The special stock list consists of the 50 most highly
capitalized stocks in the S&P 500 Stock Price Index, any stocks in
the Major Market Index (XMI) that are not among the 50, and the 10
most highly capitalized stocks in the S&P 400 MidCap Index. See
Securities Exchange Act Release No. 31732 (January 14, 1993), 58 FR
6036 (January 25, 1993).
\8\ The Exchange submitted a similar proposal eliminating the
use of the special stock list for order imbalances published at the
close and mandating that market-at-the-close (``MOC'') imbalances of
50,000 shares or more be published for all stocks on any trading day
and permitting the publication of order imbalances under 50,000
shares upon floor official approval. See Securities Exchange Act
Release No. 40094 (June 15, 1998), 63 FR 33975 (June 22, 1998); and
NYSE Information Memo No. 98-20 (June 22, 1998).
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III. Definition
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\9\ In
particular, the Commission finds the proposed rule change is consistent
with the requirements of section 6(b)(5) of the Act \10\ which
requires, among other things, that the rules of an exchange be designed
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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\9\ In approving this proposal, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
\10\ 15 U.S.C. 78f(b)(5).
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The proposed rule change expands the number of stocks for which
opening market order imbalances must be published. The current
procedures require that market order imbalances be published for stocks
contained on the Exchange's special stock list. The proposal, however,
requires that market order imbalances of 50,000 or more shares be
published for all stocks. Moreover, market order imbalances of under
50,000 shares will be permitted to be published upon approval of a
floor official.
The proposed rule change is consistent with the requirements of the
Act because it should provide market participants with more complete
information concerning market order imbalances in all stocks at the
opening on expiration days. The expansion of the coverage of the market
order imbalance publication procedure should help specialists attract
order flow, which could minimize volatility and lead to more orderly
openings on expiration days.
IV. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\11\ that the proposed rule change (SR-NYSE-98-41), as amended, is
approved.
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\11\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Margaret M. McFarland,
Deputy Secretary.
[FR Doc. 99-18112 Filed 7-14-99; 8:45 am]
BILLING CODE 8010-01-M
