[Federal Register Volume 66, Number 236 (Friday, December 7, 2001)]
[Notices]
[Pages 63581-63582]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-30323]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45118; File No. SR-NYSE-2001-34]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by the New York Stock Exchange, Inc. Amending NYSE Rule 103A To 
Delete an Unused Measure of Specialist Performance

November 29, 2001.
    On August 29, 2001, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``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 amend NYSE Rule 103A (Specialist Stock 
Reallocation and Member Education and Performance) to delete an unused 
measure of specialist performance.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    Currently, NYSE Rule 103A provides authority for the Market 
Performance Committee (``MPC'') to establish and administer measures of 
specialist performance, conduct performance improvement actions where a 
specialist unit does not meet the performance standards in the Rule, 
and reallocate stocks if a unit does not achieve its specified goals 
when subject to a performance improvement action. The performance 
standards in the Rule include the Specialist Performance Evaluation 
Questionnaire, timeliness of stock openings, SuperDot order turnaround, 
administrative message responses and market share. This latter 
provision refers to a significant decline in market share, as measured 
by share volume, in two consecutive quarters where the decline is 
determined to be attributable to factors within the control of the 
specialist unit.
    At the time the Exchange adopted the market share measure, it was 
intended that the Exchange would develop criteria as to what 
constitutes ``significant decline'' before the market share performance 
standard could be enforced. However, criteria were never developed, and 
the MPC has never used the market share standard as a performance 
measure.
    The proposed rule change was published for comment in the Federal 
Register on October 26, 2001.\3\ The Commission received no comments on 
the proposal.
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    \3\ See Securities Exchange Act Release No. 44961 (October 19, 
2001), 66 FR 54316.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange \4\ and, in 
particular, the requirements of section 6 of the Act.\5\ The Commission 
finds that the proposed rule change is consistent with section 6(b)(5) 
of the Act,\6\ which requires, among other things, that the rules of an 
exchange promote just and equitable principles of trade and in general 
to protect investors and the public interest. The Commission believes 
that the remaining measurements of specialist performance set forth in 
NYSE Rule 103A should be sufficient to assist the Exchange in ensuring 
a certain level of market quality and performance in Exchange listed 
securities is maintained. The Exchange should continue to review its 
standards for measuring specialist performance and ensure that there 
are adequate, objective measures to assess such performance.
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    \4\ In approving this proposed rule change, the Commission notes 
that it has considered the proposed rule's impact on efficiency, 
competition, and capital formation. 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f.
    \6\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-NYSE-2001-34) be, and it 
hereby is, approved.
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    \7\ 15 U.S.C. 78s(b)(2).


[[Page 63582]]


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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-30323 Filed 12-6-01; 8:45 am]
BILLING CODE 8010-01-M