[Federal Register Volume 66, Number 213 (Friday, November 2, 2001)]
[Notices]
[Pages 55725-55726]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-27526]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-44993; File No. SR-NYSE-2001-41]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. Amending the Exchange's Floor Conduct and Safety Guidelines and 
Exchange Rule 35 To Allow Specialists' Trading Assistants To Assist 
Specialist in Capturing Trades and Quotes During Active Market 
Conditions

October 26, 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 October 15, 2001, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``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 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 Exchange proposes to amend the Exchange's Floor Conduct and 
Safety Guidelines (the ``Guidelines'') with respect to policies and 
procedures on clerical employees entering a trading crowd. The Exchange 
believes that the Guidelines are a ``stated policy, practice or 
interpretation'' concerned with the administration of the Exchange. In 
addition, the exchange proposes a corresponding amendment to Exchange 
Rule 35.20 to cross-reference the proposed amendment to the Guidelines.
    The text of the proposed rule change is available at the Office of 
the Secretary, the NYSE, and 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 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 the Guidelines is to ensure that the behavior and 
practices of individuals on the Floor of the Exchange contribute to the 
efficient, undisrupted conduct of business on the Floor and do not 
jeopardize the safety or welfare of others. The Exchange believes the 
proposed rule change would enable the Exchange to keep its Guidelines 
consistent with current and new Exchange policy and procedures.

Entering or Crossing Trading Floor

    The Guidelines prohibit Floor clerical employees entering a Trading 
Crowd \3\ for any purpose, other than the resolution of Question Trade 
\4\ or open items, from ten minutes prior to the opening until five 
minutes after the close. This is popularly known as the prohibition 
against crossing the ``blue line.''
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    \3\ A trading crowd is defined as a group of Exchange members 
with a defined area of function tending to congregate around a 
trading post pending execution of orders. These are specialists, 
floor traders, odd-lot dealers, and other brokers as well as smaller 
groups with specialized functions (Barron's Dictionary of financial 
and Investment Terms).
    \4\ Indicates a trade in which, during the comparison process, 
one participant is discovered to be incorrectly identified. See 
Glossary, New York Stock Exchange Web page, www.nyse.com (visited 
October 23, 2001). See also NYSE Rule 134.
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    The Exchange believes that with the elimination of Exchange 
reports,\5\ there may be a need, under active market conditions, for 
specialist' trading assistants to stand in front of the post to assist 
in capturing trades and quotes.

[[Page 55726]]

Accordingly, the Exchange is proposing to amend its Guidelines to 
permit specialists' trading assistants to act in this capacity, 
provided that prior Floor official approval is obtained.
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    \5\ According to the NYSE, it was the duty of Exchange reporters 
to report trades to the tape. As of August 2, 2001, this position 
has been eliminated by the Exchange. Telephone conversation between 
Jeff Rosenstrock, Senior Special Counsel, NYSE, and Christopher 
Solgan, Law Clerk, and Lisa Jones, Staff Attorney, Division of 
Market Regulation, Commission (October 25, 2001).
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Exchange Rule 35

    Exchange Rule 35.20 provides that ``Floor employees of members and 
member organizations are not allowed to be upon or to cross the trading 
area of the Floor for any purpose during the period between ten minutes 
preceding the opening of the market and five minutes following the 
close of the market.'' In order to conform the above rule to the 
Guidelines, the Exchange is proposing to amend this paragraph by cross-
referencing the proposed amendment to the Guidelines.
(2) Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act\6\ in general and furthers the objectives 
of section 6(b)(5) of the Act\7\ in particular in that it is designed 
to facilitate transactions in securities and remove impediments to and 
perfect the mechanism of a free and open market. The Exchange believes 
the revisions to the Guidelines support these goals by promoting the 
efficient, undisrupted conduct of business on the Trading Floor.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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, 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 has become effective pursuant to section 
19(b)(3)(A)(i) of the Act\8\ and subparagraph (f)(1) of Rule 19b-4\9\ 
thereunder because the proposed rule change is a ``stated policy, 
practice or interpretation'' concerned with the administration of 
Exchange Rule 35. At any time within 60 days of the filing of such 
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.
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    \8\ 15 U.S.C. 78s(b)(3)(A)(i).
    \9\ 17 CFR 240.19b-4(f)(1).
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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 File No. SR-NYSE-2001-41 and 
should be submitted by November 23, 2001.

    For the Commission by the Division of Market Regulation, 
pursuant to delegated authority.\10\

    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-27526 Filed 11-1-01; 8:45 am]
BILLING CODE 8010-01-M