[Federal Register Volume 63, Number 62 (Wednesday, April 1, 1998)]
[Notices]
[Page 15908]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-8534]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39808; File No. SR-NYSE-98-09]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. Relating to the Trading of Bonds

March 26, 1998.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act'' or ``Act''),\1\ notice is hereby given that on March 
13, 1998, 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.
---------------------------------------------------------------------------

    \1\15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The NYSE is proposing an interpretation of Rule 85 (``Cabinet 
Dealings''). Specifically, pursuant to paragraph (b) of that rule, the 
Exchange is proposing to make convertible bonds eligible for trading in 
its Automated Bond System (``ABS''). Following such eligibility, all 
listed bonds will trade in ABS and the NYSE will close its bond trading 
Floor effective June 1, 1998.

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 85(b) provides that the NYSE can designate ``those 
bonds to be dealt in by use of cabinets. * * *'' ABS, an automated 
trading system, is the ``cabinet'' trading system for bonds. 
Historically, only bonds that cannot convert into common stock have 
traded in ABS. Bonds convertible into common stock have not been 
designated as eligible for ABS; rather, they have traded on the bond 
Floor. Over time, trading activity has declined on the bond Floor, and 
it no longer is efficient to provide for the trading of convertible 
bonds on the Floor. Thus, to provide for more economic and efficient 
trading of bonds, this proposed rule change would make convertible 
bonds eligible for trading in ABS under Rule 85, allowing the Exchange 
to close the bond Floor. In addition, this will result in the 
availability of expanded quotation information in listed bonds. The 
Exchange has sufficient capacity in ABS to include these bonds in the 
system.
2. Statutory Basis
    The Exchange represents that the proposed rule change is consistent 
with Section 6(b) of the Act,\2\ in general, and furthers the 
objectives of Section 6(b)(5)\3\ in particular, in that it is 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.
---------------------------------------------------------------------------

    \2\15 U.S.C. 78f(b).
    \3\15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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

    The Exchange does not believe that the proposed rule change will 
impose any inappropriate burden on competition.

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

    The foregoing rule change constitutes a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule and, therefore, has become effective 
pursuant to Section 19(b)(3)(A) of the Act\4\ and subparagraph (e) of 
Rule 19b-4 thereunder.\5\ At any time within 60 days of the filing of 
the proposed rule change, the Commission may summarily abrogate such 
rule change if it appears to the Commission that such action is 
necessary or appropriate in the public interest, for the protection of 
investors, or otherwise in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \4\15 U.S.C. 78s(b)(3)(A).
    \5\17 CFR 240.19b-4.
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. 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, located at the above address. 
Copies of such filing also will be available for inspection and copying 
at the principal office of the NYSE. All submissions should refer to 
File No. SR-NYSE-98-09 and should be submitted by April 23, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
---------------------------------------------------------------------------

    \6\17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-8534 Filed 3-31-98; 8:45 am]
BILLING CODE 8010-01-M