Federal Register: May 5, 2000 (Volume 65, Number 88)
DOCID: FR Doc 00-11228
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
DOCUMENT ID: [Release No. 34-42727; File No. SR-NYSE-00-09]
NOTICE: NOTICES
ACTION: Self-regulatory organizations; proposed rule changes:
SUBJECT CATEGORY:
Self-Regulatory Organizations; Order Granting Accelerated Approval of Proposed Rule Change by the New York Stock Exchange, Inc. Amending Exchange Rule 123B
DOCUMENT SUMMARY:
April 27, 2000.
I. Introduction
On February 28, 2000, the New York Stock Exchange, Inc. (``NYSE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'', pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b4
thereunder,\2\ a proposed rule change to amend Exchange Rule 123B. The
proposed rule change was published for comment in the Federal Register
on March 31, 2000. The Commission has received no comments on the
proposal. This order grants accelerated approval to the proposed rule change.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
II. Description of the Proposal
The Exchange seeks permanent approval of a pilot program that two amendments to Exchange Rule 123B. The first amendment to Rule 123B provides for the commissionfree execution of all orders received by Exchange specialists through the SuperDOT system if such orders are executed within five minutes. The Exchange instituted the pricing initiative of commissionfree executions beginning with trades executed on December 29, 1999.
A second amendment added language to Rule 123B to clarify that if an order that had been placed with the specialist is canceled and replaced, the replacement order is considered a new order for purposes of the Rule. Since the implementation of the pilot program, the Exchange is not aware of any problems associated with the program.
The Exchange is now proposing to make the pilot program with
respect to commissionfree executions and cancelled/replaced orders
permanent.\3\ The Exchange believes that the pilot program is operating
successfully and requests permanent approval of the proposed rule change.\4\
\3\ The Commission notes that it approved these two amendments
to Exchange Rule 123B on a pilot basis on November 30, 1999. See
Exchange Act Release No. 42184 (November 30, 1999), 64 FR 68710
(December 8, 1999), File No. SRNYSE9940. A third amendment to
Exchange Rule 123B relating to execution reports of stopped orders
was also proposed and approved by the Commission. However, the
Exchange decided not to implement this third amendment due to
capacity and resource limitations. See letter from James E. Buck,
Senior Vice President and Secretary. Exchange, to Richard Stasser,
Assistant Director, Division of Market Regulation, Commission, dated
February 25, 2000. In this proposed rule change, the Commission
provided notice of the modified pilot program instituting only two
out of the three amendments originally proposed in SRNYSE9940.
\4\ On March 22, 2000, the Commission also approved on an
accelerated basis the Exchange's request to extend the pilot program
relating to commissionfree executions and cancelled/replaced orders
until April 26, 2000. See Exchange Act Release No. 42694 (April 17,
2000), 65 FR 24245 (April 25, 2000), File No. SRNYSE0013. III. Discussion
The Commission finds that the proposed rule change relating to
commissionfree executions and cancelled/replaced orders is consistent
with the requirements of the Act. In particular, the Commission finds
the proposal is consistent with Section 6(b)(5) \5\ which requires,
among other things, that the rules of an exchange be 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 proposed rule change is also consistent with Section
11A(a)(1)(C) \6\ of the Act which states that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure, among other things,
economically efficient execution of securities transactions, and fair
competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchanges.
\5\ 15 U.S.C. 78f(b)(5).
\6\ 15 U.S.C. 78k1(a)(1)(C).
The proposed rule change eliminating commissions on orders received
through the SuperDOT system that are executed within a timely fashion
furthers the Exchange's ability to compete effectively for order flow
from other marketplaces. Competition between and among markets drives
market intermediaries to provide more efficient services which, in
turn, promotes a free and open market and benefits investors and the
public interest. Investors and the public interest may also benefit from the accompanying reduction in transaction costs.\7\
\7\ In approving this rule change, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the date of publication of notice of filing in the Federal Register. In addition to the reasons noted above, the Exchange has stated that the program is operating without problems. Because the pilot approval expires on April 26, 2000, accelerated approval of this filing will permit the Exchange to continue its program for commissionfree execution of orders received through SuperDOT permanently and without interruption, and will resolve the treatment of cancelled and replaced orders.
IV. Conclusion
It Is Therefore Ordered, pursuant to 19(b)(2) of the Act,\8\ that the proposed rule change (SRNYSE0009) is approved. \8\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\9\
\9\ 17 CFR 200.303(a)(12).
Jonathan G. Katz,
Secretary.
[FR Doc. 0011228 Filed 50400; 8:45 am]
BILLING CODE 801001M
SUMMARY:
New York Stock Exchange, Inc.,
DOCUMENT BODY 2:
April 27, 2000.
I. Introduction
On February 28, 2000, the New York Stock Exchange, Inc. (``NYSE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission'', pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b4
thereunder,\2\ a proposed rule change to amend Exchange Rule 123B. The
proposed rule change was published for comment in the Federal Register
on March 31, 2000. The Commission has received no comments on the
proposal. This order grants accelerated approval to the proposed rule change.
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b4.
II. Description of the Proposal
The Exchange seeks permanent approval of a pilot program that two amendments to Exchange Rule 123B. The first amendment to Rule 123B provides for the commissionfree execution of all orders received by Exchange specialists through the SuperDOT system if such orders are executed within five minutes. The Exchange instituted the pricing initiative of commissionfree executions beginning with trades executed on December 29, 1999.
A second amendment added language to Rule 123B to clarify that if an order that had been placed with the specialist is canceled and replaced, the replacement order is considered a new order for purposes of the Rule. Since the implementation of the pilot program, the Exchange is not aware of any problems associated with the program.
The Exchange is now proposing to make the pilot program with
respect to commissionfree executions and cancelled/replaced orders
permanent.\3\ The Exchange believes that the pilot program is operating
successfully and requests permanent approval of the proposed rule change.\4\
\3\ The Commission notes that it approved these two amendments
to Exchange Rule 123B on a pilot basis on November 30, 1999. See
Exchange Act Release No. 42184 (November 30, 1999), 64 FR 68710
(December 8, 1999), File No. SRNYSE9940. A third amendment to
Exchange Rule 123B relating to execution reports of stopped orders
was also proposed and approved by the Commission. However, the
Exchange decided not to implement this third amendment due to
capacity and resource limitations. See letter from James E. Buck,
Senior Vice President and Secretary. Exchange, to Richard Stasser,
Assistant Director, Division of Market Regulation, Commission, dated
February 25, 2000. In this proposed rule change, the Commission
provided notice of the modified pilot program instituting only two
out of the three amendments originally proposed in SRNYSE9940.
\4\ On March 22, 2000, the Commission also approved on an
accelerated basis the Exchange's request to extend the pilot program
relating to commissionfree executions and cancelled/replaced orders
until April 26, 2000. See Exchange Act Release No. 42694 (April 17,
2000), 65 FR 24245 (April 25, 2000), File No. SRNYSE0013. III. Discussion
The Commission finds that the proposed rule change relating to
commissionfree executions and cancelled/replaced orders is consistent
with the requirements of the Act. In particular, the Commission finds
the proposal is consistent with Section 6(b)(5) \5\ which requires,
among other things, that the rules of an exchange be 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 proposed rule change is also consistent with Section
11A(a)(1)(C) \6\ of the Act which states that it is in the public
interest and appropriate for the protection of investors and the
maintenance of fair and orderly markets to assure, among other things,
economically efficient execution of securities transactions, and fair
competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchanges.
\5\ 15 U.S.C. 78f(b)(5).
\6\ 15 U.S.C. 78k1(a)(1)(C).
The proposed rule change eliminating commissions on orders received
through the SuperDOT system that are executed within a timely fashion
furthers the Exchange's ability to compete effectively for order flow
from other marketplaces. Competition between and among markets drives
market intermediaries to provide more efficient services which, in
turn, promotes a free and open market and benefits investors and the
public interest. Investors and the public interest may also benefit from the accompanying reduction in transaction costs.\7\
\7\ In approving this rule change, the Commission has considered
the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
The Commission finds good cause for approving the proposed rule change prior to the thirtieth day after the date of publication of notice of filing in the Federal Register. In addition to the reasons noted above, the Exchange has stated that the program is operating without problems. Because the pilot approval expires on April 26, 2000, accelerated approval of this filing will permit the Exchange to continue its program for commissionfree execution of orders received through SuperDOT permanently and without interruption, and will resolve the treatment of cancelled and replaced orders.
IV. Conclusion
It Is Therefore Ordered, pursuant to 19(b)(2) of the Act,\8\ that the proposed rule change (SRNYSE0009) is approved. \8\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\9\
\9\ 17 CFR 200.303(a)(12).
Jonathan G. Katz,
Secretary.
[FR Doc. 0011228 Filed 50400; 8:45 am]
BILLING CODE 801001M