[Federal Register Volume 61, Number 238 (Tuesday, December 10, 1996)]
[Notices]
[Pages 65099-65100]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31334]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38015; File No. SR-NYSE-96-32]


Self-Regulatory Organizations; New York Stock Exchange, 
Incorporated; Notice of Filing of Proposed Rule Change Relating to the 
Exchange's Policy on Tape Indications

December 3, 1996.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on November 26, 1996, the New 
York Stock Exchange, Inc. (``NYSE'' or ``Exchange'') filed with the 
Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change as described in Items I, II, and III below, which 
Items have been prepared by the self-regulatory organization. The 
Commission is publishing this notice to

[[Page 65100]]

solicit comments on the proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The NYSE, pursuant to Rule 19b-4 of the Act,\2\ proposes to amend 
the Exchange Policy on Indications, Openings and Reopenings, which will 
be issued as an Information Memorandum.
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    \2\ 17 CFR 240.19b-4.
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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 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 self-regulatory organization 
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
    Indications are price ranges published on the tape before the 
opening or during a trading halt to display the probable price range in 
which a stock will open or reopen.
    The Exchange's policy on dissemination of tape indications 
currently requires a minimum of 5 minutes to elapse between the first 
indication and the opening or reopening of a stock. In addition, when 
multiple indications are used, a minimum of 10 minutes must elapse 
after the last indication when it does not overlap the prior 
indication; a minimum of 5 minutes must elapse after the last 
indication when it overlaps the prior indication. In all cases, a 
minimum of 15 minutes must elapse between the first indication and the 
opening or reopening of a stock.
    The Exchange is proposing that these minimum time periods before 
opening or reopening a stock be compressed from 15 to 10 minutes after 
the first indication; and to 5 minutes after the last indication, 
regardless of whether it overlaps the prior indication, provided that a 
minimum of 10 minutes elapse between the first indication and the 
opening or reopening of a stock. The Exchange believes that a minimum 
time period of 10 minutes for dissemination has proven sufficient in 
other contexts, such as the publication of imbalances of 50,000 shares 
or more of market-on-close orders on trading days other than expiration 
days.
    Over the years, in developing procedures for openings, the Exchange 
has focused on providing a balance between timeliness and 
appropriateness of price, i.e., achieving a price that reflects an 
appropriate equilibrium of buying and selling interest at the time. 
Since current procedures were formulated, the speed of communications 
has increased, meaning that relevant market information can be 
disseminated and responded to very quickly. The proposed rule change 
would shorten the time period for indications, thereby allowing the 
opening or reopening of a stock in a more expeditious fashion, while 
still providing sufficient time for appropriate pricing of orders.
    The revised procedures for tape indications strike an appropriate 
balance between preserving the price discovery process while providing 
timely opportunities for investors to participate in the market.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b)(5) of the 
Act in that 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, 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

    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. 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 the Exchange. All submissions should 
refer to File No. SR-NYSE-96-32 and should be submitted by December 31, 
1996.

    For the Commission, by the Division of market Regulation, 
Pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-31334 Filed 12-9-96; 8:45 am]
BILLING CODE 8010-01-M