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Notice

Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the New York Stock Exchange, Inc. Relating to Changes to Audit Trail Account Identification Codes

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Information about this document as published in the Federal Register.

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Start Preamble February 20, 2002.

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 January 23, 2002, 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 NYSE. 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 Exchange proposes to introduce a new identification code/audit trail account type, “Q,” to indicate a proprietary trade by a member to cover the member's own error pursuant to Exchange Rule 134. The text of the proposed rule change is available at the Office of the Secretary, the NYSE, and the Commission.

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

NYSE Rule 134 requires a member or member organization who acquires or assumes a security position resulting from an error transaction to clear such error transaction in the member's or his or her member organization's error account, or in the error account established for a group of members.[3] Pursuant to Rule 132,[4] the Exchange is proposing to expand the use of the audit trail account type field to require designation of the identifier “Q” to indicate a proprietary trade by a member on the Floor which results in a position being established in the member's error account, or in the liquidation of a position in the member's error account. The Exchange believes that this new account Start Printed Page 9342identification code will enhance its ability to conduct automated surveillance of members' error trading.

Member firms would be given a reasonable period of time (approximately three months from Commission approval) to make their own system enhancements so that they may be in compliance with the new trade type identification requirement. The Exchange will publish the entire revised list of Account Identification Codes, including the new account type, “Q,” in an Information Memo to be issued to all members and member organizations. For previous information memos on this subject, see 1993-7 (March 4, 1993) and 1992-34 (November 13, 1992).

2. Statutory Basis

The Exchange believes that its proposal is consistent with section 6(b) of the Act,[5] in general, and section 6(b)(5) of the Act,[6] in particular, because it is 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. The Exchange believes the addition of the identifier “Q” for “proprietary trades to cover the member's own error” will add to the protection of investors by enhancing the Exchange's ability to conduct automated surveillance of members' error trading.

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 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 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 Room. Copies of such filing will also be available for inspection and copying at the principal office of the Exchange. All submissions should refer to File No. SR-NYSE-2002-08 and should be submitted by March 21, 2002.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[7]

J. Lynn Taylor,

Assistant Secretary.

End Signature End Preamble

Footnotes

3.  See Securities Exchange Act Release No. 44769 (September 6, 2001), 66 FR 47710 (September 13, 2001). (SR-NYSE-99-25).

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4.  Rule 132.30(9)-(10) requires each clearing member organization to submit trade data elements to the Exchange that specify whether the account for which the order was executed was that of a member or member organization or of a non-member or non-member organization, and such other information as the Exchange may from time to time require.

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[FR Doc. 02-4722 Filed 2-27-02; 8:45 am]

BILLING CODE 8010-01-P