[Federal Register Volume 59, Number 130 (Friday, July 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16571]
[[Page Unknown]]
[Federal Register: July 8, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34302; File No. SR-NYSE-94-10]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by New York Stock Exchange, Inc., Relating to Amendments to Rule
127 (Block Positioning) and Rule 72(b) (``Clean'' Agency Crosses)
July 1, 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 March
17, 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.
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change consists of amendments to Exchange Rule
127 on Block Positioning and 72(b) on ``clean'' agency crosses.
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
Rule 127, which governs procedures for handling block crosses
outside the prevailing quotation, was originally adopted in June 1972
and amended in February 1976. The Exchange recently undertook a review
of the Rule and determined that, due to changes in trading rules and
practices since the Rule was first adopted, it should be revised to
simplify the language and eliminate a number of provisions that the
Exchange believes are no longer appropriate.
Specifically, the Exchange has determined:
To eliminate the requirement that a member affecting an
agency cross outside of the prevailing quotation give up the greater of
5% of 1,000 shares of the amount crossed to orders on the specialist
book limited to the cross (clean-up) price;
To eliminate the reference to the block positioner's
responsibility for maintaining the after market when the block
positioner has not satisfied the reasonable needs of the specialist;
To require documentation on the Floor when an agency block
cross outside the prevailing quotation is effected and the specialist's
book does not participate. This may be done after the trade has been
completed. The Exchange expects these procedures to include
notification of a Floor Official.
In addition, Rule 72(b) will be amended to include the same
documentation requirements for agency crosses under the Rule as those
proposed for agency block crosses under Rule 127.
The Exchange believes that the deletion of the requirements to give
the greater of 5% or 1,000 shares of the cross to orders on the
specialist's book in agency cross transactions is appropriate to
conform the agency cross principles of Rule 127 with the agency cross
principles of Rule 72(b). Under both rules, a member may still
participate in the cross transaction by providing price improvement to
one side of the cross. The Exchange is not proposing to amend the
requirement in Rule 127 that a member organization that is establishing
or increasing a position must fill, at the clean-up price, public
orders limited to the clean-up price or better before retaining any
stock for its proprietary account.
The Exchange believes that it is appropriate to place
responsibility for the after-market on the specialist rather than the
block positioner, as the specialist is otherwise responsible under
Exchange rules for the maintenance of a fair and orderly market.\1\ The
Exchange believes that the proposed Floor documentation requirement
will help ensure appropriate regulatory oversight with respect to
agency cross transactions.
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\1\See NYSE Rule 104 (Dealings by Specialists).
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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 their 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 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-94-10 and should be
submitted by July 29, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 94-16571 Filed 7-7-94; 8:45 am]
BILLING CODE 8010-01-M
