[Federal Register Volume 66, Number 61 (Thursday, March 29, 2001)]
[Notices]
[Pages 17212-17213]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-7710]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44093; File No. SR-NYSE-00-37]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Approving Proposed Rule Change 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Rule 395, Which Reference Rescinded Exchange Rule 390 or Off-Board 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

March 22, 2001.

I. Introduction

    On August 16, 2000, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change to rescind parts of, or the 
entire text of, NYSE Rules that either reference rescinded NYSE Rule 
390 or restrict off-Board transactions. The proposed rule change was 
published for comment in the Federal Register on September 27, 2000.\3\ 
No comments were received on the proposal. This order approves the 
NYSE's proposal.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240,19b-4.
    \3\ Securities Exchange Act Release No. 43309 (September 20, 
2000), 65 FR 58137.
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II. Description of the Proposal

    Former Exchange Rule 390, the NYSE's off-Board trading rule, 
prohibited Exchange members and their affiliates from effecting 
transactions in exchange-listed securities away from a national 
securities exchange. The Commission approved the recission of Exchange 
rule 390 on May 5, 2000.\4\ As a result, the NYSE is proposing to 
rescind 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that reference rescinded Exchange Rule 390, or off-Board trading 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.\5\
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    \4\ Securities Exchange Act Release No. 42758 (May 5, 2000), 65 
FR 30175 (SR-NYSE-99-48).
    \5\ For purposes of this notice, the terms ``off-Floor'' and 
``off-Board'' are used interchangeably.
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Rule 112A.10: Reports by Off-Floor Traders (Form 82-P)

    Rule 112A.10 requires members or members 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

[[Page 17213]]

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 will 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 is proposing 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. The Exchange is proposing 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; members, member 
organizations, and affiliated persons are no longer restricted from 
trading as principal or agent in the over-the-counter market in a 
covered security.
III. Discussion
    The Commission finds that the proposal is consistent with the 
requirements of the Act and the rules and regulations thereunder 
applicable to a national securities exchange. Specifically, the 
Commission believes that the proposal is consistent with the 
requirements of Section 6(b)(5) of the Act \6 \because 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.\7\ The 
Commission believes that the proposal will correct inconsistencies in 
the NYSE Rules created by the rescission of Exchange Rule 390, by 
revising or eliminating Exchange Rules that either reference rescinded 
Exchange Rule 390, or restrict off-Board transactions in general. 
Moreover, by removing barriers to off-Board trading, the rescission of 
Rule 390 and revisions to these related Exchange Rules will help to 
support free and open markets within the national market system.
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    \6\ 15 U.S.C. 78f(b)(5).
    \7\ In approving this rule, the Commission has considered the 
proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
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IV. Conclusion

    For the foregoing reasons, the Commission finds that the proposal 
is consistent with the requirements of the Act and rules and 
regulations thereunder.
    It Is Therefore Ordered, pursuant to Section 19 (b)(2) of the 
Act,\8\ that the proposed rule change (SR-NYSE-00-37) is approved.
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    \8\ 15 U.S.C. 78s(b)(2).
    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-7710 Filed 3-28-01; 8:45 am]
BILLING CODE 8010-01-M