[Federal Register Volume 62, Number 147 (Thursday, July 31, 1997)]
[Notices]
[Pages 41118-41119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20170]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38873; File SR-NYSE-97-15]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change and Amendment No. 
1 by the New York Stock Exchange, Inc. Relating to Requirements for 
Notification by Member Organizations of Participation in Distributions

July 24, 1997.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 
(the ``Act''),\1\ notice is hereby given that on May 21, 1997, the New 
York Stock Exchange, Inc. (``NYSE'' or ``the Exchange'') filed with the 
Securities and Exchange Commission (``Commission'') the proposed rule 
change. The Exchange subsequently filed Amendment No. 1 on June 20, 
1997. The proposed rule change and Amendment No. 1 are 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 
and to grant accelerated approval of the proposed rule change.
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    \1\ 15 U.S.C. Sec. 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 an amendment to NYSE Rule 392 
to require notification by member organizations of any stabilizing bid 
made in connection with an offering of an Exchange-listed security. 
Proposed new language is in italics.

Notification Requirements for Offerings of Listed Securities

Rule 392
    (a) No change.
    (b) Any Exchange member or member organization effecting a 
syndicate covering transaction or imposing a penalty bid or placing or 
transmitting a stabilizing bid in a listed security shall provide prior 
notice of such to the Exchange in such format and within such time 
frame as the Exchange may from time to time require.

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 III below and is set forth in Sections A, 
B, and C below.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    In March 1997, the Exchange proposed Rule 392 to require 
notification to the Exchange whenever a member organization acts as a 
lead underwriter in any offering of an Exchange-listed security. The 
Exchange's Rule 392 codifies the notification requirements of 
Regulation M under the Act.\2\ The Commission approved Rule 392 on 
April 4, 1997.\3\
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    \2\ See Securities Exchange Act Release No. 38067 (December 20, 
1996), release adopting anti-manipulation rules concerning 
securities offerings (``Reg M'').
    \3\ See Securities Exchange Act Release No. 38478 (April 4, 
1997).
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    The Exchange is now proposing to amend Rule 392 with respect to 
notification of any stabilizing bid made in connection with an 
offering. Rule 104(h)(1) under Reg M requires notification to the 
market when any person makes a stabilizing bid.\4\ The Exchange 
understands that such notification to the market includes notification 
to the Exchange as a self-regulatory organization. To encompass this, 
the Exchange proposes to add a requirement in Rule 392 for 
stabilization notification. The Exchange originally proposed to require 
the date and time of a stabilizing bid or transaction under Rule 392(a) 
but subsequently amended the proposal under Amendment No. 1, to require 
prior notice of the placing or transmitting of a stabilizing bid 
pursuant to Rule 392(b).
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    \4\ See Securities Exchange Act Release No. 38067 (December 20, 
1996), adopting Reg M. See also Securities Exchange Act Release No. 
38363 (March 4, 1997), regarding technical amendments to Regulation 
M.
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2. Statutory Basis
    The statutory basis for the proposed rule change is the requirement 
under Section 6(b)(5) of the Act that an Exchange 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.

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. 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 NW., Washington, DC 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 in the 
Commission's Public Reference Room, 450 Fifth Street, NW., Washington, 
DC 20549.
    Copies of such filing will also be available for inspection and 
copying at the principal office of the above-mentioned self-regulatory 
organization. All submissions should refer to the file number in the 
caption above and should be submitted by August 21, 1997.

[[Page 41119]]

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    The Commission finds that the NYSE's proposal is consistent with 
the Act and the rules and regulations thereunder applicable to national 
securities exchanges. Specifically, the Commission finds that the 
proposed rule change is consistent with section 6(b)(5) of the Act that 
requires that an exchange have rules that are designed to prevent 
fraudulent and manipulative acts and practices, 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.
    In addition, the Commission believes that the Exchange's proposal 
to enhance timely notification to the Exchange of stabilizing bids made 
with respect to offerings of NYSE-listed securities will facilitate 
compliance with Regulation M. The Commission therefore finds good cause 
for approving the proposed rule change prior to the thirtieth day after 
the date of publication of filing thereof in the Federal Register.
    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\5\ that the proposed rule change, NYSE-97-15, be, and hereby is, 
approved.

    \5\ 15 U.S.C. Sec. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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[FR Doc. 97-20170 Filed 7-30-97; 8:45 am]
BILLING CODE 8010-01-M