[Federal Register Volume 59, Number 177 (Wednesday, September 14, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22660]
[[Page Unknown]]
[Federal Register: September 14, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34644; File No. SR-NYSE-94-30]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by New York Stock Exchange, Inc., Relating to Permanent Approval
of Revisions to the Exchange's Allocation Policy and Procedures
September 7, 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 August
12, 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 the Exchange's request for
permanent approval of revisions to its Allocation Policy and Procedures
that were implemented on a one year pilot basis.
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
The intent of the Allocation Policy and Procedure (the ``Policy'')
is to ensure that each security listed on the Exchange is allocated in
the fairest manner possible to the best specialist unit for that
security. In its continuing efforts to enhance allocation decisions,
the Exchange conducts periodic reviews of the allocation process.\1\ As
the result of one such review, the Exchange filed proposed revisions
with the Commission on June 17, 1992 (see SR-NYSE-92-15). At the
request of the Commission, the Exchange requested that the proposed
rule changes take effect on a one year pilot basis. The Commission
approved the filing on October 29, 1993 (see Release No. 34-33121). The
Exchange fully integrated the changes to the Policy in February 1994.
The Exchange is now seeking permanent approval of the proposed rule
change. The changes to the Policy are summarized below.
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\1\Subsequent to implementation of the pilot program discussed
below, the Exchange conducted another comprehensive review of the
allocation process and filed further revisions to the Policy (see
SR-NYSE-94-18).
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The revisions to the Policy:
Limit, to no more than one-third, the weight that the
Specialist Performance Evaluation Questionnaire (``SPEQ'') may be
afforded in the allocation decision making process.
Require that SPEQ performance data be presented to the
Allocation Committee in four tiers, with units listed alphabetically in
each comparable group.
Require information about a specialist unit's contracts
during the prior six and 12 month periods with listed companies and
Exchange member organizations to be included in the Allocation
Application.
Require the allocation panel to consist of a core group of
experienced, senior professionals.
Eliminate specialist representation on the Allocation
Committee.
Require that the Allocation Committee list be kept
confidential and prohibit Exchange members and investment bankers from
initiating contact with Allocation committee members regarding pending
allocations.
State that the Exchange will honor the request of a
listing company that it not be allocated to its former specialist unit,
or the specialist in the parent or related company.
Permit current Allocation Committee members, including
outgoing members, to vote for an incoming Committee chairman.
Delete, as obsolete, the objective performance measure
pertaining to the Opening Automated Report Service contained in the
policy.
Discontinue the practice of distributing a summary of
reasons for each allocation decision to Exchange Floor members.
Delete the reference to specific aspects of trading
foreign issues on the Exchange Floor.
Standardize the agenda used to educate Allocation
Committee chairman and members.
The Exchange has reviewed the changes to the Policy as they have
impacted on the allocation process and it believes that there has been
a beneficial effect in terms of the way in which stocks are allocated.
The Exchange continues to subject this vital function to rigorous
scrutiny, looking to refine the process, as is evidenced by the filing
of further changes to the Policy cited earlier.
2. Statutory Basis
The Exchange believes that 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 rule changes are consistent with these
objectives in that they enable the Exchange to further enhance the
process by which stocks are allocated to ensure fairness and equal
opportunity in the process.
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
designated 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 persons, 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 NYSE. All
submissions should refer to File No. SR-NYSE-94-30 and should be
submitted by October 5, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-22660 Filed 9-13-94; 8:45 am]
BILLING CODE 8010-01-M
