[Federal Register Volume 67, Number 40 (Thursday, February 28, 2002)]
[Notices]
[Pages 9341-9342]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-4722]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-45462; File No. SR-NYSE-2002-08]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the New York Stock Exchange, Inc. Relating to Changes to 
Audit Trail Account Identification Codes

February 20, 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 January 23, 2002, 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 NYSE. 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 introduce a new identification code/audit 
trail account type, ``Q,'' to indicate a proprietary trade by a member 
to cover the member's own error pursuant to Exchange Rule 134. 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
    NYSE Rule 134 requires a member or member organization who acquires 
or assumes a security position resulting from an error transaction to 
clear such error transaction in the member's or his or her member 
organization's error account, or in the error account established for a 
group of members.\3\ Pursuant to Rule 132,\4\ the Exchange is proposing 
to expand the use of the audit trail account type field to require 
designation of the identifier ``Q'' to indicate a proprietary trade by 
a member on the Floor which results in a position being established in 
the member's error account, or in the liquidation of a position in the 
member's error account. The Exchange believes that this new account

[[Page 9342]]

identification code will enhance its ability to conduct automated 
surveillance of members' error trading.
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    \3\ See Securities Exchange Act Release No. 44769 (September 6, 
2001), 66 FR 47710 (September 13, 2001). (SR-NYSE-99-25).
    \4\ Rule 132.30(9)-(10) requires each clearing member 
organization to submit trade data elements to the Exchange that 
specify whether the account for which the order was executed was 
that of a member or member organization or of a non-member or non-
member organization, and such other information as the Exchange may 
from time to time require.
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    Member firms would be given a reasonable period of time 
(approximately three months from Commission approval) to make their own 
system enhancements so that they may be in compliance with the new 
trade type identification requirement. The Exchange will publish the 
entire revised list of Account Identification Codes, including the new 
account type, ``Q,'' in an Information Memo to be issued to all members 
and member organizations. For previous information memos on this 
subject, see 1993-7 (March 4, 1993) and 1992-34 (November 13, 1992).
2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\5\ in general, and section 6(b)(5) of the Act,\6\ in 
particular, 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 a national market system and, in general, 
to protect investors and the public interest. The Exchange believes the 
addition of the identifier ``Q'' for ``proprietary trades to cover the 
member's own error'' will add to the protection of investors by 
enhancing the Exchange's ability to conduct automated surveillance of 
members' error trading.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 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 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 self-regulatory organization 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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
Exchange. All submissions should refer to File No. SR-NYSE-2002-08 and 
should be submitted by March 21, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 02-4722 Filed 2-27-02; 8:45 am]
BILLING CODE 8010-01-P