[Federal Register Volume 69, Number 49 (Friday, March 12, 2004)]
[Notices]
[Pages 11923-11924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5652]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49374; File No. SR-NYSE-2004-10]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. Relating to Minimum Price Variation

March 8, 2004.
    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 February 19, 2004, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the NYSE. The 
NYSE filed the proposal pursuant to section 19(b)(3)(A) under the 
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.
---------------------------------------------------------------------------

    \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 has asked the Commission to waive both the five-day 
pre-filing notice requirement and the 30-day operative delay. See 
Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NYSE proposes to amend NYSE Rule 62, ``Variations,'' to 
establish a minimum price variation of ten cents for equity securities 
trading on the NYSE at a price of $100,000 or higher. The text of the 
proposed rule change appears below; additions are italicized.
Variations
    Rule 62 Bids or offers in securities admitted to trading on the 
Exchange may be made in such variations as the Exchange shall from time 
to time determine and make known to is membership.
    Supplementary Material:
.10 Notwithstanding the provision for changing the minimum price 
variation in Rule 62, above, with respect to equity securities trading 
on the Exchange in decimal price variations pursuant to the phase-in of 
decimal pricing under the ``Decimal Implementation Plan for the 
Equities and Options Markets,'' filed with the Securities and Exchange 
Commission on July 24, 2000, the minimum price variation shall be one 
cent (0.01).
.20 With respect to equity securities trading on the Exchange at a 
price of $100,000 or greater, the minimum price variation shall be ten 
cents ($.10).

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 NYSE 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 NYSE 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
    Trading in decimals began on the NYSE on August 28, 2000. At that 
time, the Exchange amended NYSE Rule 62 to provide that bids and offers 
in securities traded on the NYSE will be at a minimum price variation 
set by the NYSE. At the initiation of decimal trading, the NYSE 
announced that the minimum price variation for all stocks trading on 
the Exchange would be one cent ($.01).
    Currently, the Exchange's trading system technology does not 
support a minimum price variation of $.01 for stock prices above 
$99,999.99. Because one security listed on the Exchange currently is 
trading near this level, the Exchange proposes to amend NYSE Rule 62 to 
provide that the minimum price variation for stocks trading at a price 
of $100,000 or greater will be ten cents (to be shown as .1). The 
proposed change reflects the unique technological circumstances 
relating to trading at that price level. The Exchange does not believe 
that requiring a minimum variation of ten cents will impose any burden 
on investors trading in securities priced at $100,000 or greater.
2. Statutory Basis
    According to the NYSE, the basis under the Act for the proposal is 
the requirement under Section 6(b)(5) of the Act \6\ that a national 
securities exchange have rules that are designed to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating, clearing, settling, processing 
information with respect to, and facilitating transactions in 
securities, 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    The NYSE does not believe that the proposed rule change imposes 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 NYSE 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

    The NYSE has filed the proposed rule change pursuant to section 
19(b)(3)(A) of the Act \7\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\8\ Because the foregoing proposed rule change: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and

[[Page 11924]]

(3) does not become operative for 30 days from the date of filing, or 
such shorter time as the Commission may designate if consistent with 
the protection of investors and the public interest, the proposed rule 
change has become effective pursuant to section 19(b)(3)(A) of the Act 
and Rule 19b-4(f)(6) thereunder.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------

    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative prior to 30 days after 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. Rule 19b-4(f)(6)(iii) also requires 
a self-regulatory organization to provide the Commission with written 
notice of its intent to file a proposed rule change pursuant to Rule 
19b-4(f)(6), along with a brief description and text of the proposed 
rule change, at least five business days prior to filing the proposed 
rule change, or such shorter time as the Commission designates. The 
NYSE has requested that the Commission waive both the five-day pre-
filing notice requirement and the 30-day operative delay to allow the 
NYSE to implement the systems change needed to continue trading stocks 
priced at $100,000 or higher without interruption.
    Although the Commission ordinarily would expect a proposed rule 
change to modify the minimum price variation to be filed pursuant to 
section 19(b)(2) of the Act,\9\ the Commission believes that, under the 
narrow circumstances presented by the current proposal, it is 
appropriate for the NYSE to file the proposal pursuant to section 
19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder. In this regard, 
the Commission notes that the proposed ten-cent minimum price variation 
would apply solely to equity securities priced at $100,000 or higher 
and that the trading of such securities raises unique technological 
issues for the Exchange. For the same reasons, the Commission believes 
that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest, and the Commission 
designates the proposal to be operative upon filing with the 
Commission.\10\ Finally, the Commission has waived the five-day pre-
filing notice requirement.
---------------------------------------------------------------------------

    \9\ 15 U.S.C. 78s(b)(2).
    \10\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    At any time within 60 days of the filing of such 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 Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether it 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. Comments may also be 
submitted electronically at the following e-mail address: [email protected]. All comment letters should refer to File No. SR-NYSE-
2004-10. The file number should be included on the subject line if e-
mail is used. To help the Commission process and review your comments 
more efficiently, comments should be sent in hardcopy or by e-mail but 
not by both methods. 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 NYSE. All 
submissions should refer to File No. SR-NYSE-2004-10 and should be 
submitted by April 2, 2004.
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
Jill M Peterson,
Assistant Secretary.
[FR Doc. 04-5652 Filed 3-11-04; 8:45 am]
BILLING CODE 8010-01-P