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Notice

Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the New York Stock Exchange, Inc. Rescinding Parts of, or the Entire Text of, Exchange Rule 112A.10, Rule 321.25, Rule 392, Rule 393 and Rule 395, Which Reference Rescinded Exchange Rule 390 or Off-Board Trading Restrictions

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Information about this document as published in the Federal Register.

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Start Preamble September 20, 2000.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] and Rule 19b-4 thereunder,[2] notice is hereby given that on August 17, 2000, 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 Exchange. The Commission is publishing this Start Printed Page 58138notice 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The proposed rule change rescinds parts of, or the entire text of, the following Exchange rules that reference rescinded Exchange Rule 390, or off-Board trading restrictions: Rule 112A.10, Rule 321.25, Rule 392, Rule 393 and Rule 395.[3]

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 Exchange 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 Exchange 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 purpose of this proposed rule change is to rescind parts of, or the entire text of, Exchange Rules that either reference rescinded Exchange Rule 390, or restrict off-Board transactions. Rule 390 was the Exchange's off-Board trading rule, which prohibited Exchange members and their affiliates from effecting transactions in exchange-listed securities away from a national securities exchange. The Commission approved the rescission of Exchange Rule 390 on May 5, 2000.[4] The proposed rule change also rescinds Exchange Rules that restrict off-Board transactions in general because the rescission of Rule 390 permits members to execute orders in Exchange-listed securities in any marketplace at any time.

The following Rules meet the criteria described above, and are therefore, proposed to be deleted, in whole or in part: Rule 112A.10 (Reports by Off-Floor Traders, Form 82-P); Rule 321.25 (Formation or Acquisition of Subsidiaries—Off-Board transactions); Rule 392 (Notification Requirements for Offerings of Listed Securities); Rule 393 (Secondary Distributions); and Rule 395 (Off-Floor Transactions in Listed Rights).

Rule 112A.10: Reports by Off-Floor Traders (Forms 82-P)

This rule requires members or member organizations to send a weekly report on Form 82-P covering off-Floor trading, upon the request of the Exchange. Since Rule 390 has been rescinded, this practice is no longer in effect and the report is no longer needed.

Rule 321.25: Formation or Acquisition of Subsidiaries—Off-Board Transactions

Section .25 of Rule 321 requires subsidiaries of members or member organizations to obtain Exchange permission before effecting a transaction in a listed stock off the Floor of the Exchange. Since Rule 390 has been rescinded, such permission would no longer be needed before effecting a transaction in a listed stock off the Floor of the Exchange.

Rule 392: Notification Requirements for Offerings of Listed Securities

The reference in this Rule to “secondary distributions pursuant to Rule 393” is no longer necessary as the Exchange proposes to rescind Rule 393 (see below).

Rule 393: Secondary Distributions

Rule 393 requires the prior approval of the Exchange for member organizations to participate in an “over-the-counter” or “off-board” secondary distribution of a security admitted to dealing on the Exchange. With the rescission of Rule 390, members may execute order/transactions in Exchange-listed securities in any marketplace at any time. Therefore, the Exchange proposes to rescind this Rule as it is an off-Board transaction restriction.

Rule 395: Off-Floor Transactions in Listed Rights

Rule 395 mandates that members, member organizations, and affiliated persons not effect any transaction in any subscription right admitted to dealing on the Exchange, in the over-the-counter market, either as principal or agent (subject to certain exceptions). The rescission of Rule 390 necessitates the rescission of this Rule because it is a restriction against off-Floor transactions; Exchange Rule 390 no longer restricts members, member organizations, and affiliated persons from trading as principal or agent in the over-the-counter market in a covered security.

2. Statutory Basis

The Exchange believes the basis under the Act for the proposed rule change is the requirement under Section 6(b)(5) [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 rescission of Rule 390 as well as these related Exchange Rules, and the Exchange's request that the Commission adopt an industry-wide customer price protection rule, serve to support free and open markets and the national market system.

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, Participates 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 date of 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, 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 NW., Washington, DC 20549-0609. Copies of Start Printed Page 58139the 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 4 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. 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-00-37 and should be submitted by October 18, 2000.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[6]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  For purposes of this notice, the terms “off-Floor” and “off-Board” are used interchangeably.

Back to Citation

4.  Securities Exchange Act Release No. 42758 (May 5, 2000); 65 FR 30175 (May 10, 2000) (SR-NYSE-99-48).

Back to Citation

[FR Doc. 00-24736 Filed 9-26-00; 8:45 am]

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