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Self-Regulatory Organizations; New York Stock Exchange, Inc.; Order Approving Proposed Rule Change Relating to Mediation and Administrative Conferences

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Information about this document as published in the Federal Register.

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Start Preamble Start Printed Page 5324 January 27, 2003.

On November 4, 2002, the New York Stock Exchange, Inc. (“Exchange” or “NYSE”) filed with the Securities and Exchange Commission (“Commission” or “SEC”), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 19b-4 thereunder,[2] a proposed rule change. On December 18, 2002, the NYSE submitted Amendment No. 1 to the proposal.[3] On December 27, 2002, the Exchange's rule proposal was published for comment in the Federal Register, as amended.[4] No comments letters were received on the proposal. This order approves the proposed rule change.

The NYSE proposes to allow its current pilot rules to expire and adopt amended rules for mediation and administrative conferences.[5] In particular, the Exchange's proposal would: (i) Allow parties to agree to mediation at their own expense; (ii) provide for the scheduling of an administrative conference at the request of the parties or discretion of the arbitrator(s) or Director of Arbitration; (iii) permit the Director to appoint a staff member or arbitrator to preside at the administrative conference which is to be held via telephone conference call and limited to procedural matters. The proposal also would amend NYSE Rules 628 (Agreement to Arbitrate) and 630 (Uniform Arbitration Code) to reflect these changes.

After careful review, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange [6] and, in particular, the requirements of Section 6 and the rules and regulations thereunder.[7] Specifically, the Commission believes the proposal is consistent with the Section 6(b)(5) requirements that the rules of an exchange be designed to promote just and equitable principles of trade, to prevent fraudulent and manipulative acts, and, in general, to protect investors and the public interest. In particular, the Commission believes that the proposed rule change should help NYSE members, member organizations, and the public have a fair and impartial forum for the resolution of their disputes. Further, the Commission believes that the proposed rule is a reasonable effort by the Exchange to improve the efficiency of its dispute resolution arbitration process.

It is therefore ordered, pursuant to Section 19(b)(2) of the Act,[8] that the proposed rule change (File No. SR-NYSE-2002-59) is hereby approved.

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For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[9]

Margaret H. McFarland,

Deputy Secretary.

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3.  See letter to Florence Harmon, Senior Special Counsel, SEC, from Darla Stuckey, Corporate Secretary, NYSE, dated December 17, 2002 (“Amendment No. 1”).

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4.  See Securities Exchange Act Release No. 47025 (December 18, 2002), 67 FR 79214.

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5.  On November 19, 1998, the Commission approved a two-year pilot program for mediation and administrative conferences in the Exchange's arbitration facility. See Securities Exchange Act Release No. 34-40695 (November 19, 1998); 63 FR 65834 (November 30, 2000), (SR-NYSE-98-27). On December 29, 2000, the Commission approved amendments to the pilot rules and granted a two-year extension. See Securities Exchange Act Release No. 34-47076 (December 29, 2000); 66 FR 1710 (January 9, 2001), (SR-NYSE-00-39). The Commission extended this pilot for an additional thirty days until January 31, 2003. See Securities Exchange Act Release No. 34-43785 (December 20, 2002); 67 FR 79680 (December 30, 2002), (SR-NYSE-2002-65).

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6.  In approving this rule, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).

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[FR Doc. 03-2406 Filed 1-31-03; 8:45 am]