[Federal Register Volume 69, Number 249 (Wednesday, December 29, 2004)]
[Notices]
[Pages 78084-78085]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-28481]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50912; File No. SR-NYSE-2004-61]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 Thereto by the New York Stock Exchange, Inc. 
to Rescind a Type of Order Known as an Institutional XPress[reg] Order 
Through Amendments to Exchange Rules 13, 60 and 72

December 22, 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 October 28, 2004, 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 Exchange. On 
December 3, 2004, the NYSE filed Amendment No. 1 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Form 19b-4 dated December 3, 2004 (``Amendment No. 1''). 
In Amendment No. 1, the NYSE changed the basis under which the 
proposed rule change was filed from Section 19(b)(3) of the Act to 
Section 19(b)(2) of the Act.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to rescind a type of order known as an 
Institutional XPress[reg] Order (``XPress Order'') by amending NYSE 
Rules 13 (Definitions of Orders), 60 (Dissemination of Quotation) and 
72 (Priority and Precedence of Bids and Offers).\4\ The text of the 
proposed rule change is available at the Office of the Secretary, the 
NYSE, and at the Commission.
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    \4\ See Securities Exchange Act Release Nos. 43763 (December 21, 
2000), 65 FR 83120 (December 29, 2000) (SR-NYSE-99-24) and 47614 
(April 2, 2003), 68 FR 17140 (April 8, 2003) (SR-NYSE-2002-55). See 
also Information Memo Nos. 01-16 (July 9, 2001) and 03-21 (May 15, 
2003).
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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 include 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
    In SR-NYSE-99-24, the Commission approved the Exchange's amendments 
to NYSE Rules 13 and 72 to create a new type of order, the XPress[reg] 
Order. In light of the Exchange's recent hybrid market filing,\5\ the 
Exchange now seeks to rescind the XPress Order type, including the 
amendments made to NYSE Rules 13 and 72 in SR-NYSE-99-24. The Exchange 
believes that the goal of the XPress Order, clean executions by market 
participants when entering large-size orders in response to bids and 
offers which have been displayed for a minimum time period, would be 
satisfied by the Exchange's hybrid market initiative. In the pending 
hybrid market filing, the Exchange proposes enhancements to NYSE 
Direct+[reg] that would esstentially accomplish the same thing as an 
XPress Order.\6\
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    \5\ See Securities Exchange Act Release Nos. 50173 (August 10, 
2004), 69 FR 50407 (August 16, 2004) and 50667 (November 15, 2004), 
69 FR 67980 (November 22, 2004) (SR-NYSE-2004-05).
    \6\ Pursuant to the proposed amendments in the hybrid market 
filing (see supra note 5), auto ex market orders, marketable limit 
orders and incoming ITS commitments to trade routed to the Display 
Book, regardless of size, would be eligible for automatic execution 
against the trading interest reflected in the Exchange's published 
quotation, with any unfilled balance ``sweeping'' the book, broker 
agency interest file and specialist interest file until executed, 
its limit price, if any, is reached, or a liquidity replenishment 
point is reached.
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    The Exchange also proposes to rescind the amendments made in 
connection with the execution of XPress Orders in the NYSE 
LIQUIDITYQUOTE[reg] filing.\7\ Specifically, the Exchange proposes to 
rescind Supplementary Material .40 of NYSE Rule 13, which provides that 
a liquidity bid or offer, regardless of size, will be XPress eligible 
if it has been published for at least 15 seconds. In addition, the 
Exchange proposes to rescind NYSE Rule 60(d)(iii) which discusses the 
execution of XPress Orders when liquidity bids or offers are 
disseminated.
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    \7\ See Securities Exchange Act Release No. 47614 and 
Information Memo 03-21, supra note 4.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act\8\ in general, and furthers the objectives 
of Section 6(b)(5) of the Act\9\ 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.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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 neither solicited nor received written comments on 
the proposed rule change.

[[Page 78085]]

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 Exchange 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. Comments may be submitted by any of 
the following methods:
Electronic Comments:
     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send and e-mail to [email protected]. Please include 
File Number SR-NYSE-2004-61 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-NYSE2004-
61. 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, 450 Fifth 
Street, NW., Washington, DC 20549. 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-2004-61 and should be submitted on or before January 19, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-28481 Filed12-28-04; 8:45 am]
BILLING CODE 8010-01-M