[Federal Register Volume 67, Number 190 (Tuesday, October 1, 2002)]
[Notices]
[Pages 61706-61707]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24910]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46547; File No. SR-NYSE-2002-38]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. To Expand the Hours of Operation of Its Off-Hours Trading Facility 
Known as Crossing Session II

September 25, 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 August 29, 2002, the New York Stock Exchange (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'' or ``SEC'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. The NYSE has designated this proposed rule change as one that 
has become effective upon filing with the Commission pursuant to 
section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(5) \4\ thereunder 
because it effects a change in an existing order-entry or trading 
system of a self-regulatory organization that does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
have the effect of limiting the access to or availability of the 
system.\5\ 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.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(5).
    \5\ Id.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The New York Stock Exchange proposes to expand the operating hours 
of one of its Off-Hours Trading Facilities, known as Crossing Session 
II.

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 proposed rule change is to expand the time of 
operation of the Exchange's Off-Hours Trading Facility (``OHTF'') known 
as Crossing Session II. Currently, the OHTF consists of ``Crossing 
Session I,'' which permits the execution, at the Exchange's closing 
price, of single stock, single sided closing price orders and crosses 
of single-stock, closing price buy and sell orders. The OHTF also 
consists of ``Crossing Session II,'' which provides an opportunity for 
members and member organizations to cross program trading orders in 
NYSE listed securities on the Exchange between 4 p.m. and 5:15 p.m. 
based on the aggregate price of the program. Matched buy and sell 
orders for a minimum of 15 NYSE listed stocks having a minimum dollar 
value of $1 million may be transmitted to the Exchange for execution in 
Crossing Session II. These orders are transmitted via facsimile 
detailing the total number of stocks, total number of shares and total 
dollar value. Average daily volume reported in Crossing Session II is 
23.4 million shares for 2002.
    The Exchange proposes to expand the hours of operation of Crossing 
Session II until 6:15 p.m. each day that the Exchange is open for its 
regular 9:30 a.m. to 4 p.m. trading session. Expanding the time of 
operation of Crossing Session II is simply intended to enhance the 
usefulness and practicality of Crossing Session II by

[[Page 61707]]

making it available to member organizations for a greater time period.
    In approving Crossing Session II, the Commission granted exemptive 
relief from its Rule 10a-1 \6\ under the Act (short sale rule) for 
transactions effected therein, finding that such transactions did not 
raise all of the same regulatory concerns that are raised by similar 
transactions during the 9:30 a.m. to 4 p.m. trading session. The 
Exchange is requesting that the Commission extend the exemptive relief 
from Rule 10a-1 \7\ currently available for transactions effected in 
Crossing Session II to transactions effected in Crossing Session II as 
modified by this proposed rule change.
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    \6\ 17 CFR 240.10a-1.
    \7\ Id.
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    Exchange Rule 51 provides for the operation of Off-Hours Trading 
``during such times as the Exchange may from time to time specify.'' 
Upon approval of the proposed rule change, the Exchange will alert its 
membership and other market participants of the new operating hours for 
Crossing Session II.
2. Statutory Basis
    The Exchange believes that the basis under the Act for this 
proposed rule change is the requirement under section 6(b)(5) \8\ 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.
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    \8\ 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 
result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act, as amended.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    Written comments were neither solicited nor received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The proposed rule change has become effective pursuant to section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(5) \10\ thereunder because 
it effects a change in an existing order-entry or trading system of a 
self-regulatory organization that does not: (i) Significantly affect 
the protection of investors or the public interest; (ii) impose any 
significant burden on competition; and (iii) have the effect of 
limiting the access to or availability of the system.\11\ At any time 
within 60 days of this filing, the Commission may summarily abrogate 
this proposal 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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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(5).
    \11\ Id.
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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 proposal 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 Exchange. All 
submissions should refer to file number SR-NYSE-2002-38 and should be 
submitted by October 22, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-24910 Filed 9-30-02; 8:45 am]
BILLING CODE 8010-01-P