[Federal Register Volume 66, Number 138 (Wednesday, July 18, 2001)]
[Notices]
[Pages 37509-37510]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-17890]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44539; No. SR-NYSE-2001-14]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. To Amend Rule 13 on XPress 
Quote Parameters

July 11, 2001.
    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 June 13, 2001, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the

[[Page 37510]]

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 notice to solicit comments on the proposed rule change from 
interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

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 
13.30 to decrease the minimum number of shares for XPress order and 
quotes and to decrease the time that a published bid or offer must 
remain at the same price to be XPress eligible. The text of the 
proposed rule change is set forth below. Additions are in italics. 
Deletions are in brackets.
Rule 13  Definitions of Orders
Supplementary Material
* * * * *
.30  The minimum number of shares for an XPress order is [25,000] 
15,000 shares. The published bid or offer must be at the same price for 
no less than [25,000] 15,000 shares for at least [30] 15 seconds in 
order to be indicated as an XPress Quote.
* * * * *

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
    As part of its continuing efforts to enhance participation in its 
auction market, the Exchange created a new type of order, known as an 
XPress Order, which was approved by the Commission in December 2000.\3\ 
The Exchange believes that this order type responds to the needs of 
market participants for ``clean executions when entering large-size 
orders in response to bids and offers which have been displayed for a 
minimum time period.
    An XPress order is defined as an order of a specified minimum size 
which is to be executed against a displayed XPress quote, or at an 
improved price, if obtainable. In order to be indicated as an XPress 
quote, a published bid or offer must be for no less than the specified 
minimum share size at the same price for no less than 30 seconds. The 
minimum size for XPress orders and XPress quotes initially has been set 
at 25,000 shares.
---------------------------------------------------------------------------

    \3\ See Securities Exchange Act Release No. 43763 (December 21, 
2000) 65 FR 83120 (December 29, 2000).
---------------------------------------------------------------------------

    In filing SR-NYSE-99-24, the Exchange discussed decreasing the 
minimum size and time thresholds for XPress orders and quotations 
within six months after the initial implementation of the XPress 
product. At this time, and in accordance with this previously expressed 
intention, the Exchange proposes to amend NYSE Rule 13.30 to:
    (i) Reduce the minimum size of an XPress quote from 25,000 shares 
to 15,000 shares;
    (ii) Reduce the time period for designation as an XPress quote from 
30 seconds to 15 seconds; and
    (iii) Reduce the minimum size of an XPress order from 25,000 shares 
to 15,000 shares.
    The Exchange believes that these reductions in the size and time 
thresholds are appropriate in order to expand the availability of the 
XPress product.
2. Statutory Basis
    The Exchange believes the basis for this proposed rule change is 
the requirement under 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. In addition, the Exchange 
believes that the XPress system is consistent with Section 
11A(a)(1)(C)(i) of the Act \5\ in that it is in the public interest and 
appropriate for the protection of investors and the maintenance of fair 
and orderly markets to assure the economically efficient execution of 
securities transactions.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b)(5).
    \5\ 15 U.S.C. 78k-1(a)(1)(C)(i).
---------------------------------------------------------------------------

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 not solicited or 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 Exchange 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 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. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
NYSE. All submissions should refer to the File No. SR-NYSE-2001-14 and 
should be submitted by August 8, 2001.

    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. 01-17890 Filed 7-17-01; 8:45 am]
BILLING CODE 8010-01-M