[Federal Register Volume 67, Number 8 (Friday, January 11, 2002)]
[Notices]
[Pages 1529-1531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-809]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45249; File No. SR-NYSE-2001-55]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. To Amend NYSE Rule 51 
Relating to Suspension of Trading

January 7, 2002.
    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 December 31, 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 NYSE Rule 51, Hours for Business, to 
make emergency procedures more flexible and more responsive to the 
Exchange's current organizational structure and to the kinds of 
challenges that the Exchange may face. The text of the proposed rule 
change is below. Proposed new language is in italics; deletions are in 
brackets.
Rule 51. Hours for Business
    Except as may be otherwise determined by the Board of Directors as 
to particular days, the Exchange shall be open for the transaction of 
business on every business day, excluding Saturdays,
    (a) for a 9:30 a.m. to 4:00 p.m. trading session, and
    (b) for the purposes of ``Off-Hours Trading'' (as Rule 900 (Off-
Hours Trading: Applicability and Definitions) defines that term), 
during such hours as the Exchange may from time to time specify.
    [The Chairman, Vice-Chairman and the Senior Floor Director or in 
the absence from the Floor of any of them, the next senior Floor 
Director present on the Floor acting by a majority shall have the power 
to suspend trading in all securities whenever in their opinion such 
suspension would be in the public interest. A special meeting of the 
Board

[[Page 1530]]

of Directors to consider the continuation or termination of such 
suspension or closing the market shall be held as soon thereafter as a 
quorum of Directors can be assembled.]
    Except as may be otherwise determined by the Board of Directors, 
the Chairman of the Board shall have the power to halt or suspend 
trading in some or all securities traded on the Exchange, to close some 
or all Exchange facilities, and to determine the duration of any such 
halt, suspension or closing, when he deems such action to be necessary 
or appropriate for the maintenance of a fair and orderly market or the 
protection of investors, or otherwise in the public interest, due to 
extraordinary circumstances, such as (1) actual or threatened physical 
danger, severe climatic conditions, civil unrest, terrorism, acts of 
war, or loss or interruption of facilities utilized by the Exchange, or 
(2) a request by a governmental agency or official, or (3) a period of 
mourning or recognition for a person or event. In considering such 
action, the Chairman of the Board shall consult with the Vice Chairmen, 
if available, and such available Floor Directors as he deems 
appropriate under the circumstances. The Chairman of the Board shall 
notify the Board of actions taken pursuant to this Rule, except for a 
period of mourning or recognition for a person or event, as soon 
thereafter as is feasible.
* * * * *

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 that 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 NYSE proposed to amend NYSE Rule 51 to make emergency 
procedures more flexible and more responsive to the Exchange's current 
organizational structure and to the kinds of challenges that the 
Exchange may face.
    NYSE Rule 51 sets forth the Exchange's trading hours, provides for 
``off-hours'' trading hours and provides procedures for the suspension 
of trading. (NYSE Rule 80B provides for trading halts due to 
extraordinary market volatility.)
    While NYSE Rule 51 has been modified from time to time, e.g., to 
adjust trading hours and to change holidays, the procedures for 
suspension of trading have not been substantially revised since the 
Exchange's incorporation in 1971 or since the development and 
implementation of its numerous computerized systems. These procedures 
are provided in the second paragraph of the Rule
    NYSE Rule 51's current procedure to suspend trading requires (1) 
action by a majority of the Chairman, Vice Chairman and most senior 
Floor Director available and (2) a meeting of the Board to consider 
continuation or termination or the suspension or closing the market. 
The current procedures provide only for suspension of trading of all 
securities traded on the Exchange.
    The existing procedures under NYSE Rule 51 contemplate a Board that 
is in a position to meet quickly and, perhaps, more often in emergency 
situations. The Rule does not explicitly permit a suspension of some, 
but not all, securities, which partial suspension might be the most 
appropriate response in a future emergency. The current suspension 
procedures also do not adequately deal with situations involving the 
kind of unexpected, quick and devastating actions that the nation, and 
particularly the securities industry, faced on September 11, 2001, and 
days following. Nor are the current procedures effective in the face of 
the kind of system outages the Exchange experienced on June 8, 2001.
    The NYSE proposes that the Chairman, in consultation with the Vice 
Chairmen of available and with such available Floor Directors as he 
deems appropriate under the circumstances, be authorized under amended 
NYSE Rule 51 to respond to future extraordinary circumstances by 
halting or suspending trading in some or all securities traded on the 
Exchange or by closing some or all Exchange facilities, and to 
determine the duration of any such halt or suspension or closing. The 
Chairman would be required to notify the Board of actions taken, other 
than for a period of mourning or recognition for a person or event, as 
soon as feasible after the actions.
    Under the proposed rule change, action would be taken only as a 
result or extraordinary circumstances and only as the Chairman deems it 
necessary or appropriate for the maintenance of a fair and orderly 
market or the protection of investors or otherwise in the public 
interest. Examples of possible extraordinary circumstances include 
action or threatened physical danger, severe climatic conditions, civil 
unrest, terrorism, and act of war, or loss or interruption of 
facilities utilized by the Exchange. The Chairman would also be able to 
take action in the event of a request by a governmental agency or 
official, and for a period of mourning or recognition of a person or 
event.
    The Board continues to have the power to take action it deems 
necessary or appropriate in particular situations and special Board 
meetings can be convened.
2. Statutory Basis
    The NYSE believes the proposed rule change is consistent with the 
requirement under Section 6(b)(5) of the Act \3\ that an Exchange have 
rules that are designed 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 proposed rule change is designed 
to accomplish these ends by strengthening the Exchange's ability to 
respond appropriately and in a timely fashion to future extraordinary 
circumstances.
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    \3\ 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

    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 such proposed rule change or,

[[Page 1531]]

    (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 file number SR-NYSE-2001-55 and 
should be submitted by February 1, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\4\
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    \4\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-809 Filed 1-10-02; 8:45 am]
BILLING CODE 8010-01-M