[Federal Register Volume 62, Number 199 (Wednesday, October 15, 1997)]
[Notices]
[Pages 53679-53680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-27283]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39206; File No. SR-NYSE-97-27]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by the New York 
Stock Exchange, Inc. Relating to Extension of the Pilot for Allocation 
Policy and Procedures

October 6, 1997.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on September 19, 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 
and to grant accelerated approval to the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change extends the effectiveness of the pilot 
program relating to the Exchange's Allocation Policy and Procedures 
until November 28, 1997. The text of the proposed rule change is 
available at the Office of the Secretary, the NYSE, and at the 
Commission.

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. 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
    The purpose of the proposed rule change is to extend the 
effectiveness of a pilot program relating to the Exchange's Allocation 
Policy and Procedures. The Exchange's Allocation Policy and Procedures 
are intended: (1) To ensure that securities are allocated in an 
equitable and fair manner and that all specialist units have a fair 
opportunity for allocations based on established criteria and 
procedures; (2) to provide an incentive for ongoing enhancement of 
performance by specialist units; (3) to provide the best possible match 
between specialist unit and security and (4) to contribute to the 
strength of the specialist system.
    The Exchange recently implemented, on a pilot basis, a revised 
Allocation Policy and Procedures to amend the procedures by which the 
Exchange selects a specialist for newly listed companies.\3\ The 
Exchange's pilot program, which expires October 7, 1997, provides 
listing companies with two options, either: (1) To have their 
specialist unit selected by the Allocation Committee according to 
existing allocation criteria, with company input permitted in the form 
of a ``generic letter'' which may describe desired general 
characteristics of a specialist unit, but may not mention particular 
units or describe characteristics that would be applicable to a readily 
identifiable specialist unit; or (2) to make the final selection of a 
specialist unit from among three to five units selected by the 
Allocation Committee, with a generic letter from the company describing 
desired specialist unit characteristics permitted, as in (1) above. In 
the case of both options, if a generic letter is submitted, the letter 
would be distributed to all specialist units along with allocation data 
sheets (``green sheets'').
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    \3\ See Securities Exchange Act Release No. 38372 (March 7, 
1997), 62 FR 13421 (March 21, 1997) (notice of filing and immediate 
effectiveness of File No. SR-NYSE-97-04).
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    The Exchanges proposes to extend the Allocation Policy and 
Procedure pilot program until November 28, 1997 to continue to study 
its effects.
2. Statutory Basis
    The NYSE believes the proposed rule change is consistent with the 
requirements of Section 6(b)(5) of the Act \4\ 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 a national market system and, in general, to protect 
investors and the public interest. The Exchange believes that extending 
the effectiveness of the Allocation Policy and Procedures until 
November 28, 1997 is consistent with these objectives in that they 
enable the Exchange to further enhance the process by which stocks are 
allocated between specialist units to ensure fairness and equal 
opportunity in the process.
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    \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.

[[Page 53680]]

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 NYSE. All submissions should 
refer to File No. SR-NYSE-97-27 and should be submitted by November 5, 
1997.

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

    The Commission finds the proposed rule change is consistent with 
the requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange.\5\ Specifically, the 
Commission believes the Exchange's proposal to extend the effectiveness 
of the pilot program until November 28, 1997 is consistent with Section 
6(b)(5) of the Act \6\ because the extension will permit the NYSE to 
further study the impact of the revised Allocation Policy and 
Procedures. The Commission notes that the extension is limited in 
duration. The Commission believes that it is reasonable to extend the 
pilot program for a short period of time to allow the Exchange further 
time to determine whether the revised allocation procedures are fair to 
all market participations, including listing companies, specialist 
units and public investors. The Commission expects the NYSE to submit 
any supplemental information it has on the pilot program, along with 
any request to modify, extend, or permanently approve the pilot by 
October 17, 1997.
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    \5\ In approving this rule, the Commission notes that it has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f(b)(5).
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    The Commission finds good cause for approving the proposed rule 
change prior to the 30th day after publication of the proposed rule 
change in the Federal Register. The Commission notes that accelerated 
approval will enable the Exchange to continue the Allocation Policy and 
Procedures pilot program on an uninterrupted basis. The Commission 
further notes that it has previously solicited comments on the pilot 
program and no comments were received. Further, the extension of the 
existing pilot is of limited duration, only until November 28, 1997. 
For the foregoing reasons, the Commission believes that good cause 
exists pursuant to Section 19(b)(2) of the Act \7\ to approve the 
proposed rule change on an accelerated basis.
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    \7\ 15 U.S.C. 78s(b)(2).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-NYSE-97-27) is hereby 
approved on an accelerated basis until November 28, 1997.
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    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12)
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-27283 Filed 10-14-97; 8:45 am]
BILLING CODE 8010-01-M