[Federal Register Volume 60, Number 2 (Wednesday, January 4, 1995)]
[Notices]
[Pages 518-519]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35147; File No. SR-NYSE-94-39; SR-Phlx-94-29; SR-PSE-
94-34; SR-BSE-94-15; SR-CHX-94-28; SR-NASD-94-67]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by New York Stock Exchange, Inc., Philadelphia Stock Exchange, 
Inc., Pacific Stock Exchange, Inc., Boston Stock Exchange, Inc., 
Chicago Stock Exchange, Inc., and National Association of Securities 
Dealers, Inc. Relating to Short Interest Reporting Requirements

December 23, 1994.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on 
October 27, 1994, the New York Stock Exchange, Inc., Philadelphia Stock 
Exchange, Inc., Pacific Stock Exchange, Inc., Boston Stock Exchange, 
Inc., Chicago Stock Exchange, Inc., and National Association of 
Securities Dealers, Inc. (the ``SROs'')\1\ filed with the Securities 
and Exchange Commission (``Commission'') the proposed rule change as 
describe in Items I, II and III below, which Items have been prepared 
by the self-regulatory organizations. The Commission is publishing this 
notice to solicit comments on the proposed rule change from interested 
persons.

    \1\The self-regulatory organizations listed herein will 
collectively be referred to as the (``SROs'').
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The proposed rule changes consist of (1) revisions to the rules of 
the SROs with existing short interest reporting requirements, and (2) 
adoption of short interest reporting rules for the SROs currently 
without any such requirement. All of the proposed rule changes will 
require members and member organizations of the SROs to report short 
interest positions to the SROs if the particular SRO is the designated 
examining authority for that member.\2\

    \2\The NASD, however requires reporting for all members of their 
short positions not otherwise reported to another SRO, irrespective 
of its DEA status. In doing so, the NASD seeks to ensure that it 
receives short position reporting for all NASDAQ securities. 
Conversation with Suzanne Rothwell, NASD, and Amy Bilbija, 
Commission, dated December 21, 1994.
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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 SROs included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any [[Page 519]] comments they received on the proposed rule 
changes. The text of these statements may be examined at the places 
specified in Item IV below. The SROs have 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 current NYSE and NASD rules require clearing member firms to 
report positions resulting from short sales, as that term is defined in 
Rule 3b-3 of the Securities Exchange Act of 1934, in Exchange listed 
securities and, with respect to the NASD, securities included in the 
NASDAQ System. Such reports are required on a monthly basis, submitted 
via electronic transmission of the data through the Securities Industry 
Automation Corporation (``SIAC''). The SROs utilize such data, in 
general, to surveil market activity. In addition, the NYSE publishes a 
monthly release of short interest information as a service to listed 
companies, the investing public, market professionals and other 
interested parties.
    The SROs have worked closely with each other as members of the 
Inter-Market Surveillance Group (``ISG''), a group which includes 
representatives of every U.S. securities self-regulatory organization, 
to address problems that reach across marketplaces. ISG members have 
identified uniform short position reporting as an important 
surveillance tool that can be utilized to good effect in monitoring 
possible anomalous trading situations. Each member of the ISG is 
planning to adopt similar provisions.
    Generally, the SROs propose to require all members to report short 
interest positions to the SRO that is the designated examining 
authority (``DEA'') for that member. In addition, most SROs will 
require those members for which the SRO is not the DEA to report to the 
SRO which is its DEA, unless that SRO does not have a reporting 
requirement. In cases where no reporting is required by the DEA, the 
member would be required to report short position information to the 
SRO where it is a member irrespective of its non-DEA status.
    Reports to the SROs would primarily include listed and registered 
securities, not otherwise reported to another SRO. Reporting would be 
required at such times as designated by the SROs. Finally, most rules 
would clarify that both proprietary and customer positions must be 
reported.
    The full text of each SRO's proposed rule change is available at 
the Commission's Public Reference Room and at the offices of each 
respective SRO.
2. Statutory Basis
    The SROs believe that the basis under the Securities Exchange Act 
of 1934 (the ``Act'') for the proposed rule changes is the requirement 
under Section 6(b)(5) and 15A(b)(6), as applicable, that an SRO have 
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, in general, to protect investors and the public 
interest. The proposed rule changes are consistent with these 
objectives in that they would enhance the Exchanges' regulatory and 
surveillance capabilities with respect to short interest reporting, 
augment market transparency for certain securities, enable investors to 
make more informed decisions, and provide greater disclosure for 
regulatory purposes.

B. Self-Regulatory Organization's Statement on Burden on Competition

    The SROs do not believe that the proposed rule changes 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 SROs have neither solicited nor received written comments on 
the proposed rule changes.

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

    Within 35 days of the 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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of each SRO. All 
submissions should refer to File No. SR-NYSE-94-39; SR-Phlx-94-29; SR-
PSE-94-34; SR-BSE-94-15; SR-CHX-94-28; SR-NASD-94-67, as applicable, 
and should be submitted by January 25, 1995.

    For the Commission, by the Division of Market Regulations, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-28 Filed 1-3-95; 8:45 am]
BILLING CODE 8010-01M