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Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the New York Stock Exchange, Inc. Relating to Amendment to Rule 111

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Start Preamble January 29, 2003.

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 8, 2003, 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 Exchange. 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 is proposing to amend rule 111(a) to correct internal rule references. The references to other rules in rule 111 were not updated at the time rule 111 was reorganized.

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 NYSE 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 Exchange recently codified in the NYSE rule book several policies which had been previously filed with, and approved by, the Commission pursuant to rule 19b-4 and reorganized several other rules.[3]

When rule 111 was reorganized, three internal rule references were not updated to refer to the correct corresponding rule. The Exchange proposes to correct these references in rule 111(a) as follows.

  • In rule 111(a), the reference that reports must include all transactions executed on orders initiated or originated for such accounts by a member while on the Floor and all transactions which are considered on-Floor trading is found under the provisions of rule 112(c), not 112(b) as stated.
  • A competitive trader desiring to exempt neutral transactions for an account in which he or his member organization has an interest from consideration in the computation of his monthly stabilizing percentage is provided for under the provisions of rule 110(g)(2), not 112(d)(2); he must report the trade date, number of shares, and price of stock upon acquisition.
  • In addition, rule 110(g)(1), not 112(d)(1), provides that a competitive trader must note with the symbol “NL” that the transaction was effected as part of the initial sale of a newly listed security.

2. Statutory Basis

The Exchange's basis under the Act for this proposed rule change is the requirement under section 6(b)(5) of the Act [4] that an Exchange have rules that are designed to promote just and equitable principles of trade, to remove impediments to and perfect the mechanisms 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 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

The proposed rule change has become effective pursuant to section 19(b)(3)(A)(iii) of the Act [5] and subparagraph (f)(3) of rule 19b-4 thereunder,[6] because it is concerned solely with the administration of the Exchange. At any time within 60 days of the filing of the 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 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 the File No. SR-NYSE-2003-02 and should be submitted by February 26, 2003.

Start Signature
Start Printed Page 5951

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

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


3.  See Securities Exchange Act Release No. 46579 (October 1, 2002), 67 FR 63004 (October 9, 2002) (SR-NYSE-2002-31).

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5.  15 U.S.C. 78s(b)(3)(A)(iii).

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[FR Doc. 03-2677 Filed 2-4-03; 8:45 am]