[Federal Register Volume 68, Number 10 (Wednesday, January 15, 2003)]
[Notices]
[Pages 2094-2095]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-793]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47129; File No. SR-NYSE-2003-01]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. To Extend a Pilot With Respect to Amendments to Rule 431 Relating 
to Margin Requirements for Security Futures Contracts

January 6, 2003.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on January 6, 2003, the New York Stock Exchange, Inc. 
(``NYSE'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (``SEC'' or the ``Commission'') the proposed rule change as 
described in Items I, II and III below, which Items have been prepared 
by the Exchange. The Exchange has filed the proposal as a ``non-
controversial'' rule change pursuant to Section 19(b)(3)(A)(iii) of the 
Exchange Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ which renders the 
proposal effective upon filing with the Commission.\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)(6).
    \5\ The NYSE asked the Commission to waive the 30-day operative 
delay. See Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    This proposal is to extend until March 6, 2003, the effectiveness 
of amendments to Rule 431 relating to margin requirements for Security 
Futures Contracts (``SFCs''), which the Commission approved on a pilot 
basis for sixty days (the ``Pilot'') on November 7, 2002.

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
    On October 23, 2002, the Exchange filed a proposed rule change with 
the Commission to amend Rule 431 with regard to SFCs. On November 6, 
2002, the Exchange filed an amendment with the Commission to the 
proposed rule change.\6\ This amendment was filed as a sixty-day pilot, 
and approved by the Commission on November 7, 2002,\7\ effective 
through January 6, 2003.
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    \6\ See letter from Darla C. Stuckey, Corporate Secretary, NYSE, 
to Nancy Sanow, Assistant Director, Division of Market Regulation, 
Commission, dated November 5, 2002 (``Amendment No. 1''). Amendment 
No. 1 replaced the original rule filing (SR-NYSE-2002-53 (October 
23, 2002)) in its entirety. Amendment No. 1 also proposed that the 
changes be effective for a sixty-day pilot, and requested 
accelerated approval of the proposed rule change.
    \7\ See Securities Exchange Act Release No. 46782 (November 7, 
2002), 67 FR 69052 (November 14, 2002) (SR-NYSE-2002-53).
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    The Exchange proposes to extend this Pilot for an additional sixty 
days (from January 6, 2003 until March 6, 2003) in order to allow the 
Pilot to continue in effect on an uninterrupted basis and to permit 
customers to continue trading SFCs in securities accounts while the 
Exchange considers the comments it has received on the Pilot.
2. Statutory Basis
    The Exchange believes that the basis under the Exchange Act for 
this proposed rule change is the requirement under Section 6(b)(5) of 
the Exchange Act \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. The proposed rule change is designed to accomplish these 
goals by permitting customers to trade SFCs in securities accounts.
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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 
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 received written comments on the original proposed 
rule change that was filed with the Commission on October 23, 2002 and 
amended on November 6, 2002. The Exchange is currently considering such 
comments.

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

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) does not become 
operative for 30 days (or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest) after the date of the filing, the proposed rule change has 
become effective pursuant to Section 19(b)(3)(A) of the Act \9\ and 
Rule 19b-4(f)(6) thereunder.\10\ At any time within 60 days of the 
filing of the 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 Exchange Act.
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) normally must 
not become operative prior to 30 days after the date of the filing. In 
addition, a self-regulatory organization filing a proposed rule change 
under Rule 19b-4(f)(6)(iii) normally must give the Commission written 
notice of its intent to file the proposed rule change five days prior 
to the date of filing. However, Rule 19b-4(f)(6)(iii) permits the 
Commission to designate a shorter time if such action is consistent 
with the protection of investors and the public interest. The Exchange 
has requested that the Commission waive both the five-day pre-filing 
requirement and designate that the proposed rule change become 
operative immediately to allow the Pilot to continue in effect on an 
uninterrupted basis and for the Exchange to consider comments it has 
received on the Pilot.
    The Commission believes it is consistent with the protection of 
investors and the public interest to waive the five-day pre-filing 
requirement and designate the proposal

[[Page 2095]]

immediately operative.\11\ Accelerating the operative date and waiving 
the pre-filing requirement should permit the Exchange to permit 
customers to continue to trade SFCs in securities accounts on an 
uninterrupted basis while the Exchange considers comments it has 
received on the Pilot. The Commission notes that the Exchange 
anticipates filing a new proposed rule change to adopt the Pilot on a 
permanent basis. Accordingly, the Commission designates the proposed 
rule change to be effective and operative upon filing with the 
Commission.
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    \11\ For purposes only of accelerating the operative date of 
this proposal, the Commission has considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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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 Exchange 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 in 450 Fifth Street, 
NW, Washington, DC 20549-0609. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
NYSE. All submissions should refer to SR-NYSE-2003-01 and should be 
submitted by February 5, 2003.

    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. 03-793 Filed 1-14-03; 8:45 am]
BILLING CODE 8010-01-P