[Federal Register Volume 65, Number 188 (Wednesday, September 27, 2000)]
[Notices]
[Pages 58137-58139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-24736]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43309; File No. SR-NYSE-00-37]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. Rescinding Parts of, or the 
Entire Text of, Exchange Rule 112A.10, Rule 321.25, Rule 392, Rule 393 
and Rule 395, Which Reference Rescinded Exchange Rule 390 or Off-Board 
Trading Restrictions

September 20, 2000.
    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 August 17, 2000, 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 
Exchange. The Commission is publishing this

[[Page 58138]]

notice to solicit comments on the proposed rule change from interested 
persons.
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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 rescinds parts of, or the entire text of, 
the following Exchange rules that reference rescinded Exchange Rule 
390, or off-Board trading restrictions: Rule 112A.10, Rule 321.25, Rule 
392, Rule 393 and Rule 395.\3\
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    \3\ For purposes of this notice, the terms ``off-Floor'' and 
``off-Board'' are used interchangeably.
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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 Exchange 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 Exchange 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 this proposed rule change is to rescind parts of, or 
the entire text of, Exchange Rules that either reference rescinded 
Exchange Rule 390, or restrict off-Board transactions. Rule 390 was the 
Exchange's off-Board trading rule, which prohibited Exchange members 
and their affiliates from effecting transactions in exchange-listed 
securities away from a national securities exchange. The Commission 
approved the rescission of Exchange Rule 390 on May 5, 2000.\4\ The 
proposed rule change also rescinds Exchange Rules that restrict off-
Board transactions in general because the rescission of Rule 390 
permits members to execute orders in Exchange-listed securities in any 
marketplace at any time.
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    \4\ Securities Exchange Act Release No. 42758 (May 5, 2000); 65 
FR 30175 (May 10, 2000) (SR-NYSE-99-48).
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    The following Rules meet the criteria described above, and are 
therefore, proposed to be deleted, in whole or in part: Rule 112A.10 
(Reports by Off-Floor Traders, Form 82-P); Rule 321.25 (Formation or 
Acquisition of Subsidiaries--Off-Board transactions); Rule 392 
(Notification Requirements for Offerings of Listed Securities); Rule 
393 (Secondary Distributions); and Rule 395 (Off-Floor Transactions in 
Listed Rights).

Rule 112A.10: Reports by Off-Floor Traders (Forms 82-P)

    This rule requires members or member organizations to send a weekly 
report on Form 82-P covering off-Floor trading, upon the request of the 
Exchange. Since Rule 390 has been rescinded, this practice is no longer 
in effect and the report is no longer needed.

Rule 321.25: Formation or Acquisition of Subsidiaries--Off-Board 
Transactions

    Section .25 of Rule 321 requires subsidiaries of members or member 
organizations to obtain Exchange permission before effecting a 
transaction in a listed stock off the Floor of the Exchange. Since Rule 
390 has been rescinded, such permission would no longer be needed 
before effecting a transaction in a listed stock off the Floor of the 
Exchange.

Rule 392: Notification Requirements for Offerings of Listed Securities

    The reference in this Rule to ``secondary distributions pursuant to 
Rule 393'' is no longer necessary as the Exchange proposes to rescind 
Rule 393 (see below).

Rule 393: Secondary Distributions

    Rule 393 requires the prior approval of the Exchange for member 
organizations to participate in an ``over-the-counter'' or ``off-
board'' secondary distribution of a security admitted to dealing on the 
Exchange. With the rescission of Rule 390, members may execute order/
transactions in Exchange-listed securities in any marketplace at any 
time. Therefore, the Exchange proposes to rescind this Rule as it is an 
off-Board transaction restriction.

Rule 395: Off-Floor Transactions in Listed Rights

    Rule 395 mandates that members, member organizations, and 
affiliated persons not effect any transaction in any subscription right 
admitted to dealing on the Exchange, in the over-the-counter market, 
either as principal or agent (subject to certain exceptions). The 
rescission of Rule 390 necessitates the rescission of this Rule because 
it is a restriction against off-Floor transactions; Exchange Rule 390 
no longer restricts members, member organizations, and affiliated 
persons from trading as principal or agent in the over-the-counter 
market in a covered security.
2. Statutory Basis
    The Exchange believes the basis under the Act for the proposed rule 
change is the requirement under Section 6(b)(5) \5\ 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. The rescission of Rule 390 as well as these related Exchange 
Rules, and the Exchange's request that the Commission adopt an 
industry-wide customer price protection rule, serve to support free and 
open markets and the national market system.
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    \5\ 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, Participates 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 date of 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, 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 NW., Washington, DC 20549-0609. 
Copies of

[[Page 58139]]

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 4 U.S.C. 
552, will be available for inspection and copying in the Commission's 
Public Reference Room. 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-00-37 and should 
be submitted by October 18, 2000.

    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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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-24736 Filed 9-26-00; 8:45 am]
BILLING CODE 8010-01-M