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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the New York Stock Exchange, Inc. Relating to the Expansion of the Maximum Share Size Parameter for Single Orders Entered Into the SuperDot System

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Start Preamble January 23, 2001.

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 December 29, 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. On January 10, 2001, the Exchange amended its proposal.[3] Pursuant to rule 19b-4(f)(5),[4] the Exchange has designated this proposal as one effecting a change in an existing order-entry or trading system of a self-regulatory organization that does not: (1) Significantly affect the protection of investors or the public interest, (2) impose any significant burden on competition, or (3) significantly have the effect of limiting the access to or availability of the system. As such, the proposed rule change is immediately effective upon the Commission's receipt of this filing, as amended.[5] 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 expands to one million shares the maximum share size parameter for single orders entered into the SuperDot System (“SuperDot System” or “SuperDot”).[6]

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 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's SuperDot System provides automated order routing and reporting services to facilitate the timely and effective transmission, execution, and reporting of market and limit orders on the Exchange. Pursuant to Exchange Start Printed Page 8829Rule 123B(a), members and member organizations may utilize the SuperDot System to transmit orders of such size as the Exchange may specify from time to time.

The purpose of this filing is to amend the maximum share size parameter for single market and limit orders entered into the SuperDot System. Currently, single market orders up to 30,099 shares and single limit orders up to 99,999 shares may be entered into the SuperDot System. The Exchange proposes to increase the maximum order size for both market and limit orders to 1,000,000 shares.[7] The increase in maximum order size would become effective in two stages, with an initial increase to 500,000 shares, followed in six months by an increase to 1,000,000 shares.

The Exchange believes that the proposed increase will provide many benefits to users of the SuperDot System. Specifically, the NYSE believes that the proposal will facilitate openings and closings by increasing the number of shares that can be accommodated, especially in initial public offerings. In addition, the NYSE notes that the proposal will eliminate the need for firms and institutions to break up large orders to make them SuperDot eligible; streamline the cancel and replace process; and eliminate some of the paper from the floor, which will support the goal of having a “paperless” floor. According to the NYSE, the proposed increase will also be compatible with the maximum share size capabilities of the NYSE's Broker Booth Support System. In addition, the NYSE states that the proposal would help to facilitate the electronic capture of orders as required by Exchange Rule 123.[8]

2. Statutory Basis

The basis under the Act for the proposed rule change is the requirement under Section 6(b)(5) of the Act [9] that an exchange has 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 a national market system 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.

C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others

The Exchange has neither solicited not received written comments on the proposed rule change, not necessary or appropriate in furthering of the purposes of the Act.

III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The foregoing rule change has become effective pursuant to section 19(b)(3)(A) of the Act and subparagraph (f)(5) of Rule 19b-4 thereunder because it institutes a change in an existing order-entry or trading system that (1) does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) does not have the effect of limiting access to or availability of the system. Any any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.

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 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 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 the File No. SR-NYSE-00-63 and should be submitted by February 23, 2001.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[10]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  See Letter from James E. Buck, Senior Vice President and Secretary, NYSE, to Jack Drogin, Assistant Director, Division of Market Regulation, Commission, dated January 10, 2001 (“Amendment No. 1”). In Amendment No. 1, the Exchange reduced the proposed maximum SuperDot System share size parameter from three million shares to one million shares.

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5.  For purposes of calculating the 60-day abrogation period, the Commission considers the period to begin as of the date the Exchange filed Amendment No. 1, January 10, 2001.

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6.  See Amendment No. 1 supra note 3.

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7.  See Amendment No. 1, supra note 3.

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8.  See Securities Exchange Act Release No. 43689 (December 7, 2000), 65 FR 79145 (December 18, 2000) (order approving File No. SR-NYSE-98-25).

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[FR Doc. 01-2816 Filed 2-1-01; 8:45 am]

BILLING CODE 8010-01-M