[Federal Register Volume 70, Number 109 (Wednesday, June 8, 2005)]
[Notices]
[Pages 33571-33573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-2933]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51747; File No. SR-NYSE-2005-26]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto to 
Extend the Closing Time of Crossing Session II and to Amend its 
Crossing Sessions III and IV to Eliminate the Share Size Restriction 
and the Process by Which an Order is Executed if There is No Execution 
Prior to 4 p.m.

May 26, 2005.
    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 April 8, 2005, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') submitted to 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 NYSE. On May 19, 
2005, 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\ Amendment No. 1 made clarifying changes to the Purpose 
section of the filing.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NYSE proposes to amend its Off-Hours Trading Facility 
(``OHTF'')--Crossing Sessions II, III, and IV, in particular. The 
Exchange proposes to extend the closing time of Crossing Session II 
from 6:15 p.m. to 6:30 p.m. The NYSE also proposes to amend rules 
governing Crossing Sessions III and IV to eliminate the 10,000 share 
size restriction and the process by which an order is executed if there 
is no execution prior to 4 p.m. The text of the proposed rule change is 
available on the NYSE's Web site (http://www.nyse.com), at the NYSE's 
principal office, and at the Commission's Public Reference Room.

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 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
Background
    The Exchange's OHTF consists of four sessions. Crossing Session I 
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. Crossing Session II 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 6:15 p.m., based on the aggregate price of the program. Matched buy 
and sell orders for a minimum of 15 NYSE-listed stocks that have a 
minimum dollar value of $1 million may be transmitted to the Exchange 
for execution in Crossing Session II. These orders are transmitted via 
the Exchange's Electronic Filing Platform, detailing the total number 
of stocks, total number of shares, and total dollar value.

[[Page 33572]]

    Crossing Session III allows for the execution on the NYSE of 
``guaranteed price coupled orders,'' whereby member organizations could 
fill the unfilled balance of a customer order at a price which was 
guaranteed to the customer prior to the close of the Exchange's 9:30 
a.m. to 4 p.m. trading session. Crossing Session IV is a facility 
whereby member organizations may fill the unfilled balance of a 
customer's order at a price such that the overall order is filled at a 
price that is no worse than the volume weighted average price 
(``VWAP'') for the subject security on that trading day. The member 
organization is required to document its VWAP agreement with the 
customer and the basis upon which the VWAP price would be determined. 
Crossing Sessions III and IV were approved by the Commission as pilot 
programs (the ``Pilots'') in SR-NYSE-2002-40.\4\ The Pilots are 
currently approved until February 1, 2006.\5\
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    \4\ See Securities Exchange Act Release No. 48857 (December 1, 
2003), 68 FR 68440 (December 8, 2003).
    \5\ See Securities Exchange Act Release No. 51091 (January 28, 
2005), 70 FR 6484 (February 7, 2005) (SR-NYSE-2005-01).
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    The Exchange proposes to make the following amendments to Crossing 
Sessions II, III, and IV.
Crossing Session II
    The Exchange proposes to expand the hours of operation of Crossing 
Session II from 6:15 p.m. to 6:30 p.m. each day that the Exchange is 
open for its regular 9:30 a.m. to 4 p.m. trading session.\6\ Expanding 
the time of operation of Crossing Session II is intended to enhance the 
usefulness and practicality of Crossing Session II by making it 
available to member organizations for a greater time period and to make 
it consistent with the closing time of Crossing Sessions III and IV. 
Orders in both Crossing Sessions III and IV can be entered beginning at 
4 p.m. and must be completed by 6:30 p.m.
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    \6\ See Securities Exchange Act Release No. 46547 (September 25, 
2002), 67 FR 61706 (October 1, 2002) (SR-NYSE-2002-38) (expanding 
hours of operation of Crossing Session from 5:15 p.m. to 6:15 p.m.).
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    Exchange Rule 51 provides for the operation of Off-Hours Trading 
``during such hours as the Exchange may from time to time specify.'' 
Should the Commission approve the proposed rule change, the Exchange 
will alert its membership and other market participants of the new 
operating hours for Crossing Session II.
Crossing Sessions III and IV
    Exchange Rule 907 (iii) states that a guaranteed price coupled 
order or an order to be executed at the VWAP is for the portion of the 
customer's order that could not be executed prior to 4 p.m., but in any 
event must be at least 10,000 shares. The Exchange is proposing to 
eliminate the 10,000 share size restriction in Exchange Rule 907 (iii) 
for both types of orders in Crossing Sessions III and IV, in order to 
increase the availability of Crossing Sessions III and IV to member 
organizations. In addition, the Exchange is proposing to amend the rule 
to provide that if there is no execution prior to 4 p.m, the entire 
order would be eligible for execution in the crossing session, rather 
than just the portion of the customer's order that could not be 
executed prior to 4 p.m.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act,\7\ in general, and furthers the objectives 
of Section 6(b)(5) of the Act,\8\ in particular, in that 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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    \7\ 15 U.S.C. 78f.
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change would not 
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 not solicited comments regarding the proposed rule 
change. The Exchange has not received any unsolicited written comments 
from members or other interested parties.

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 such 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, as amended, 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 an e-mail to [email protected]. Please include 
File Number SR-NYSE-2005-26 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-2005-26. 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 such 
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-2005-26 and should be submitted on or before June 
29, 2005.


[[Page 33573]]


    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-2933 Filed 6-7-05; 8:45 am]
BILLING CODE 8010-01-P