[Federal Register Volume 69, Number 128 (Tuesday, July 6, 2004)]
[Notices]
[Pages 40700-40701]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-15157]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49926; File No. SR-NYSE-2004-11]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Approving Proposed Rule Change and Amendments No. 1 and No. 2 
Thereto and Notice of Filing and Order Granting Accelerated Approval to 
Amendment No. 3 Thereto Amending NYSE Rule 122 Concerning Orders With 
More Than One Broker

June 28, 2004.

I. Introduction

    On February 20, 2004, the New York Stock Exchange, Inc. (``NYSE'' 
or ``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend NYSE Rule 122 to provide that a Floor 
Broker may send a portion of an order to a specialist's Display Book 
for representation by the specialist either manually or via a hand-held 
terminal while retaining the remainder of the same order, as long as 
the broker does not bid (offer) or execute the retained portion of the 
order at a price at which the booked order may also be represented in a 
bid (offer) or executed. The Exchange submitted Amendment No. 1 to the 
proposed rule change on April 5, 2004.\3\ The Exchange submitted 
Amendment No. 2 to the proposed rule change on April 20, 2004.\4\ The 
proposed rule change and Amendments No. 1 and 2 were published for 
comment in the Federal Register on

[[Page 40701]]

May 5, 2004.\5\ The Commission received no comment letters on the 
proposal, as amended. The Exchange submitted Amendment No. 3 to the 
proposed rule change on June 18, 2004.\6\ This order approves the 
proposed rule change and Amendments No. 1 and 2. Simultaneously, the 
Commission provides notice of filing of Amendment No. 3 and grants 
accelerated approval of Amendment No. 3.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Darla C. Stuckey, Corporate Secretary, NYSE, 
to Nancy J. Sanow, Assistant Director, Division of Market Regulation 
(``Division''), Commission, dated April 2, 2004 (``Amendment No. 
1''). In Amendment No. 1, the NYSE replaced and superseded the 
Exchange's original filing in its entirety.
    \4\ See letter from Mary Yeager, Assistant Secretary, NYSE, to 
Nancy J. Sanow, Division, Commission, dated April 19, 2004 
(``Amendment No. 2''). In Amendment No. 2, the NYSE clarified and 
expanded its rule text.
    \5\ See Securities Exchange Act Release No. 49625 (April 28, 
2004), 69 FR 25160.
    \6\ See letter from Darla C. Stuckey, NYSE, to Nancy J. Sanow, 
Division, Commission, dated June 17, 2004 (``Amendment No. 3''). In 
Amendment No. 3, the NYSE corrected a typographical error in the 
proposed rule text.
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II. Discussion and Commission Findings

    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of the Act and the rules and 
regulations thereunder applicable to a national securities exchange \7\ 
and, particularly, section 6(b)(5) of the Act.\8\ The Commission 
believes that the proposed amendments to NYSE Rule 122 setting forth 
conditions under which a Floor Broker may send a portion of an order to 
a specialist either manually or via a hand-held terminal for 
representation by the specialist while retaining the remainder of the 
same order 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 Commission believes that the 
ability to send orders from the Floor Broker's hand-held device 
directly to the specialist's limit order book may improve a broker's 
efficiency by allowing greater order management capabilities, while 
retaining the goals of the rule which, according to the NYSE, are to 
negate the possibility that the same customer could have unequal 
representation in the auction in parity situations, and to deter 
creating the appearance that there is greater trading interest in a 
stock. The Commission notes that the Exchange has represented that the 
proposed rule change, as amended, does not impose any new requirements 
or obligations and is consistent with current Exchange practice.
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    \7\ In approving this proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    The Commission finds good cause for approving Amendment No. 3 to 
the proposed rule change prior to the thirtieth day after the amendment 
is published in the Federal Register, pursuant to section 19(b)(2) of 
the Act.\9\ Amendment No. 3 deleted reference to ``an order'' from the 
first sentence of the language proposed to be added to NYSE Rule 122. 
The Commission believes that the proposed change in Amendment No. 3, 
which only makes a technical change to the proposed rule text, raises 
no new issues of regulatory concern and, therefore, believes that good 
cause exists, consistent with Section 6(b)(5)\10\ and Section 19(b) 
\11\ of the Act, to accelerate approval of Amendment No. 3.
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    \9\ 15 U.S.C. 78s(b)(2).
    \10\ 15 U.S.C. 78f(b)(5).
    \11\ 15 U.S.C. 78s(b).
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III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether Amendment No. 3 
is consistent with the Act. Comments may be submitted by any of the 
following methods:

Electronic Comments

     Use the Commission's Internet comment for (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-NYSE-2004-11 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-NYSE-2004-11. This 
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, please use only one method. The Commission will post all 
comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 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 the 
filing also will be available for inspection and copying at the 
principal office of the NYSE. All comments received will be posted 
without change; the Commission does not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly. All submissions should refer to 
File Number SR-NYSE-2004-11 and should be submitted on or before July 
27, 2004.

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\12\ that the proposed rule change (SR-NYSE-2004-11) and Amendments 
No. 1 and 2 thereto are approved, and that Amendment No. 3 thereto is 
approved on an accelerated basis.
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    \12\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-15157 Filed 7-2-04; 8:45 am]
BILLING CODE 8010-01-P