[Federal Register Volume 62, Number 122 (Wednesday, June 25, 1997)]
[Notices]
[Pages 34336-34337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16576]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38745; File No. SR-NYSE-97-21]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. Relating to Trading 
Differentials for Equity Securities

June 18, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), \1\ notice is hereby given that on June 16, 1997, 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 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 proposed rule change consists of amendments to Exchange Rules 
62, 95.30, 118, 127 and 440B to provide flexibility in determining 
minimum trading variations.\2\
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    \2\ This proposal seeks permanent approval of the procedures 
contained in File No. SR-NYSE-97-20. Securities Exchange Act Release 
No. 34-38744 (June 18, 1997) (granting temporary accelerated 
approval).
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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
    Exchange Rule 62 currently provides fixed minimum trading 
variations for stocks traded on the Exchange. For example, the rule 
currently states that ``Bids or offers in stocks above one dollar per 
share shall not be made at a less variation than \1/8\ of one dollar 
per share.'' In order to provide greater flexibility to adjust trading 
variations as may be appropriate, the Exchange is proposing to amend 
Rule 62 so that the minimum trading variation may be changed from time 
to time.
    This increased flexibility would allow the Exchange to determine 
trading variations on an expedited basis, without undergoing the delays 
inherent in the regulatory approval process. This would put the 
Exchange in a comparable regulatory position with respect to minimum 
trading variations with other exchanges which are able to change 
variations at any time.
    In addition, the amendment to Rule 62 will provide flexibility so 
that the Exchange could permit its members to trade at increments 
smaller than NYSE-established trade variations in order to match other 
markets' bids or offers for the purpose of preventing Intermarket 
Trading System (``ITS'') trade-throughs. For example, assume that the 
established minimum trading variation is one-sixteenth of a dollar, and 
the best bid on the Exchange for a particular stock is 10, but there is 
a bid for that stock on the ITS AT 10\1/32\. The Exchange specialist, 
or broker in the Crowd with a ``not held'' order, could execute a 
marketable limit order or market order to sell at 10\1/32\ in order to 
match the ITS bid. However, the specialist could not accept an order 
with a limit of 10\1/32\ since it is not the minimum variation at which 
trading is effected on the Exchange.
    The Exchange intends initially to set a minimum variation of one-
sixteenth of one dollar.
    In addition to Rule 62, several other Exchange rules incorporate 
specific references to minimum trading variations. These rules, viz., 
Rule 95.30, Rule 118, Rule 127, and Rule 440B, would be amended to 
remove references to specific minimum trading variations of one-eighth 
of one dollar.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
Section

[[Page 34337]]

6(b) \3\ of the Act in general and furthers the objectives of Section 
6(b)(5) \4\ in particular 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.
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    \3\ 15 U.S.C. 78f(b).
    \4\ 15 U.S.C. 78f(b)(5).
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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.

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 Room, 450 Fifth Street, N.W., Washington, 
D.C. 20549. Also, copies of such filing will be available for 
inspection and copying at the principal office of the NYSE. All 
submissions should refer to File No. SR-NYSE-97-21 and should be 
submitted by July 16, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 C.F.R. 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-16576 Filed 6-24-97; 8:45 am]
BILLING CODE 8010-01-M