Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Extend the Pilot for NYSE Direct+® Until December 23, 2006, 77228-77230 [E5-8066]
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77228
Federal Register / Vol. 70, No. 249 / Thursday, December 29, 2005 / Notices
Nasdaq intends for this rule change to
become operative on January 31, 2006.
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 Act.
the principal office of the NASD. 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–NASD–2005–150 and
should be submitted on or before
January 19, 2006.
IV. Solicitation of Comments
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jonathan G. Katz,
Secretary.
[FR Doc. E5–8069 Filed 12–28–05; 8:45 am]
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2005–150 on the
subject line.
Paper Comments
wwhite on PROD1PC65 with NOTICES
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR–NASD–2005–150. 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 (https://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
organization has given the Commission written
notice of its intent to file the proposed rule change,
along with a brief description and text of the
proposed rule change, at least five business days
prior to the date of filing of the proposed rule
change, or such shorter time as designated by the
Commission. Nasdaq complied with the five day
pre-filing requirement.
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18:56 Dec 28, 2005
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BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53014; File No. SR–NYSE–
2005–89]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Extend the
Pilot for NYSE Direct+ Until
December 23, 2006
December 22, 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 December
13, 2005, 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 and II below, which Items have
been prepared by NYSE. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
This proposal is to extend until
December 23, 2006, the effectiveness of
the pilot (the ‘‘Pilot’’) for NYSE Direct+
(‘‘Direct +’’). The Pilot was approved
initially on a one-year basis and
extended for several additional years,
and now expires on December 23, 2005.
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
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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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 light of the fact that the
Commission is still considering the
Exchange’s filing on proposed
enhancements to NYSE Direct+ (the
NYSE HYBRID MARKETS SM—‘‘Hybrid
Market’’) as described in SR–NYSE–
2004–05 and subsequent amendments
thereto 3, the Exchange hereby is filing
to renew its Pilot, as it currently
operates, for an additional year.
Background
NYSE Direct+ was originally
approved as a one-year pilot in SR–
NYSE–2000–18,4 ending on December
21, 2001. The Exchange then extended
the Pilot for an additional one-year,
ending December 23, 2002.5 The Pilot
was subsequently extended for an
additional one-year, ending December
23, 2003.6 It was again extended for two
additional one-year periods and now
expires on December 23, 2005.7
The NYSE Direct+ pilot provides for
the automatic execution of limit orders
of 1,099 shares or less (‘‘auto ex’’ orders)
against trading interest reflected in the
Exchange’s published quotation. It is
3 See Securities Exchange Act Release No. 50173
(August 10, 2004), 69 FR 50407 (August 16, 2004)
(Amendment No. 1 to SR–NYSE–2004–05);
Securities Exchange Act Release No. 50667
(November 15, 2004), 69 FR 67980 (November 22,
2004) (Amendment Nos. 2 and 3 to SR–NYSE–
2004–05); (The Exchange withdrew Amendment
No. 4 and replaced it with Amendment No. 5);
Securities Exchange Act Release No. 51906 (June
22, 2005), 70 FR 37463 (June 29, 2005) (Amendment
No. 5 to SR–NYSE–2004–05). See also Amendment
No. 6 to SR–NYSE–2004–05 (September 16, 2005)
and Amendment No. 7 to SR–NYSE–2004–05
(October 11, 2005).
4 See Securities Exchange Act Release No. 43767
(December 22, 2000), 66 FR 834 (January 4, 2001)
(SR–NYSE–2000–18).
5 See Securities Exchange Act Release No. 45331
(January 24, 2002), 67 FR 5024 (February 1, 2002)
(SR–NYSE–2001–50).
6 See Securities Exchange Act Release No. 46906
(November 25, 2002), 67 FR 72260 (December 4,
2002) (SR–NYSE–2002–47).
7 See Securities Exchange Act Release No. 48772
(November 12, 2003), 68 FR 65756 (November 21,
2003) (SR–NYSE–2003–30). See Securities
Exchange Act Release No. 50828 (December 9,
2004), 69 FR 75579 (December 17, 2004) (SR–
NYSE–2004–66).
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Federal Register / Vol. 70, No. 249 / Thursday, December 29, 2005 / Notices
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not mandatory that all limit orders of
1,099 shares be entered as auto ex
orders; rather, the member organization
entering the order, or its customer if
enabled by the member organization,
can choose to enter an auto ex order
when such member organization (or
customer) believes that the speed and
certainty of an execution at the
Exchange’s published bid or offer price
is in its customer’s best interest.
The Exchange proposes to extend this
Pilot for an additional year (from
December 24, 2005 until December 23,
2006). Five filings which impact NYSE
Direct+ have been filed with or
approved by the Commission during the
current Pilot are now part of the Pilot.8
These include:
(a) A filing which amended Rule 1000
to provide that NYSE Direct+
executions will not be available if the
resulting trade would be more than five
cents away from the last sale.9 The
amendment also provided that during
the process for completing Rule 127
transactions, the specialist should
publish a bid and/or offer that is more
than five cents away from the last
reported transaction price in the subject
security on the Exchange.
(b) A filing which amended Exchange
Rules 13 and 1005 in order to eliminate
size and frequency restrictions for
orders entered through NYSE Direct+
(‘‘Direct +’’) in Investment Company
Units, as defined in paragraph 703.16 of
the Listed Company Manual, Trust
Issued Receipts (such as HOLDRs), as
defined in Rule 1200, and
streetTRACKS Gold Shares, as defined
in Rule 1300, (collectively ‘‘ETFs’’).10
(c) A filing which amended Rule 1002
to include ETFs and HOLDRs and
provide that ETFs trade until 4:15 p.m.
and amended Rule 1005 to reflect that
the rule applies to ETFs and HOLDRs.11
(d) A filing which amended Rule 1005
to permit entry of limit orders up to
8 See telephone conversation between Steve L.
Kuan, Special Counsel, Division of Market
Regulation (‘‘Divison’’), Commission, and Jeffrey
Rosenstrock, Principal Rule Counsel, NYSE, on
December 21, 2005. In addition, SR–NYSE–2003–20
proposed to disengage NYSE Direct+ in fiveactively traded stocks. However, this pilot expired
on June 20, 2003 and therefore, does not impact the
Pilot as proposed to be extended. See Securities
Exchange Act Release No. 47965 (June 2, 2003), 68
FR 34691 (June 10, 2003) (SR–NYSE–2003–20).
9 See Securities Exchange Act Release No. 47463
(March 7, 2003), 68 FR 12122 (March 13, 2003) (SR–
NYSE–2002–44).
10 See Securities Exchange Act Release No. 52160
(July 28, 2005), 70 FR 44963 (August 4, 2005) (SR–
NYSE–2005–49).
11 See Securities Exchange Act Release No. 47024
(December 18, 2002), 67 FR 79217 (December 27,
2002) (SR–NYSE–2002–37). The expansion of the
Direct+ order size eligibility described in this filing
(for up to 10,000 shares) was superseded by SR–
NYSE–2005–49.
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1,099 shares within 30 seconds for an
account in which the same person has
an interest, provided that the orders are
entered from different terminals and
that the member or member
organization responsible for the entry of
the orders to the trading floor (‘‘Floor’’)
has procedures to monitor compliance
with the separate terminal
requirement.12
(e) A filing which amended Rules
1000 and 1001 in connection with the
NYSE LiquidityQuoteSM initiative.13 In
conjunction with autoquoting of bids
and offers, Rule 1000 has been amended
to provide that a NYSE Direct+ order
equal to or greater than the size of the
published bid/offer exhausts the entire
bid/offer, rather than decreases it to 100
shares.14 Rule 1001(c) provided that if
executions of auto ex orders have traded
with all trading interest reflected in the
Exchange’s published bid or offer, the
Exchange will disseminate a bid or offer
at that price of 100 shares until the
specialist requotes that market. Rule
1001(c) has been deleted.
The above-mentioned filings became
part of the NYSE Direct+ rules and
were incorporated into the Pilot upon
their respective filing or approval by the
Commission.15 Therefore, they are
extended as part of the Pilot.
If, however, the Commission approves
the Hybrid Market proposal during the
extension of the Pilot period (December
24, 2005–December 23, 2006), the
Hybrid Market proposal would
supersede this filing.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act 16 in general, and
furthers the objectives of Section 6(b)(5)
of the Act 17 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. The Exchange also
believes that the proposed rule change
is designed to support the principles of
Section 11A(a)(1) of the Act 18 in that it
12 See Securities Exchange Act Release No. 47353
(February 12, 2003), 68 FR 8318 (February 20, 2003)
(SR–NYSE–2002–58).
13 See Securities Exchange Act Release No. 47614
(April 2, 2003), 68 FR 17140 (April 8, 2003) (SR–
NYSE–2002–55).
14 See telephone conversation between Steve L.
Kuan, Special Counsel, Division, Commission, and
Jeffrey Rosenstrock, Principal Rule Counsel, NYSE,
on December 21, 2005.
15 See id.
16 15 U.S.C. 78f(b).
17 15 U.S.C. 78f(b)(5).
18 15 U.S.C. 78k–1(a)(1).
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77229
seeks to assure economically efficient
execution of securities transactions,
makes it practicable for brokers to
execute investors’ orders in the best
market and provides an opportunity for
investors’ orders to be executed without
the participation of a dealer.
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.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
does not (i) significantly affect the
protection of investors or the public
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest,
provided that the self-regulatory
organization has given the Commission
written notice of its intent to file the
proposed rule change at least five
business days prior to the date of filing
of the proposed rule change or such
shorter time as designated by the
Commission, the proposed rule change
has become effective pursuant to
Section 19(b)(3)(A) of the Act 19 and
Rule 19b–4(f)(6) thereunder.20 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.21
The Exchange requests that the
Commission waive the five business
days pre-filing requirement and the 30day operative delay under Rule 19b–
4(f)(6)(iii).22 The Exchange believes that
the continuation of the Pilot is in the
public interest as it will avoid
19 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
21 15 U.S.C. 78s(b)(3)(C).
22 17 CFR 240.19b–4(f)(6)(iii).
20 17
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77230
Federal Register / Vol. 70, No. 249 / Thursday, December 29, 2005 / Notices
inconvenience and interruption to the
public.
The Commission believes that waiver
of the 30 day operative delay is
consistent with the protection of
investors and the public interest,23
because it will allow the Exchange to
continue, without interruption, the
existing operation of the Pilot for an
additional year, while the Commission
considers the Hybrid Market.
Accordingly, the Commission
designates that the proposal shall
become operative as of the date of this
notice.
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:
wwhite on PROD1PC65 with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2005–89 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number SR–NYSE–2005–89. 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 (https://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
23 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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18:56 Dec 28, 2005
Jkt 208001
available for inspection and copying at
the principal office of the Exchange. 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–2005–89 and should
be submitted on or before January 19,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.24
Jonathan G. Katz,
Secretary.
[FR Doc. E5–8066 Filed 12–28–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53018; File No. SR–NYSE–
2005–78]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing of Proposed Rule Change
Relating to Amendments to New York
Stock Exchange Rules 35 (‘‘Floor
Employees to be Registered’’) and 301
(‘‘Proposed Transfer or Lease of
Membership’’)
December 23, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 2 thereunder,
notice is hereby given that on December
13, 2005, 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, II and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed change consists of
amendments to NYSE Rules 35 (‘‘Floor
Employees to be Registered’’) and 301
(‘‘Proposed Transfer or Lease of
Membership’’) which would limit
access to the Exchange Floor until
fingerprint reports have been properly
processed and approved and would
require an alternative background check
for persons whose fingerprints are
24 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
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deemed illegible. The text of the
proposed rule change is available on
NYSE’s Web site (https://www.nyse.com),
at NYSE’s Office of the Secretary, 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,
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. 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
NYSE Rule 35 governs the issuance of
Floor tickets (e.g., Regular Tickets and
Special Tickets) to Floor employees,
which enables them to enter upon the
trading Floor. NYSE Rule 35.70 requires
the fingerprinting of prospective
employees of members and member
organizations. Similarly, NYSE Rule
301.23 requires that prospective
members be fingerprinted.
Security concerns have suggested a
tightening of these rules in two respects:
(1) That access to the Floor be denied
for persons fingerprinted for the first
time until the fingerprinting results
have properly been processed and
accepted; and (2) that those persons
whose fingerprints cannot be read (i.e.,
are illegible) be subject to an alternative
background check acceptable to the
Exchange to cover the same criminal
convictions included by fingerprint
type. In order for a background check to
be acceptable to the Exchange, it would,
at a minimum, have to disclose the same
arrest records which the fingerprint
check would for all fifty states and,
where the applicant is foreign, through
the records of Interpol. Amendments are
also proposed to reflect the fact that the
Exchange no longer accepts fingerprint
cards, but rather processes them through
agents.3
3 See NYSE Information Memo 04–53, dated
October 8, 2004 (announcing that as of October 29,
2004, the Exchange would stop accepting new
fingerprints from its members and member
organizations and other persons and entities subject
to a fingerprinting requirement under Section 17 of
the Exchange Act, but noting that certain members
unable to submit fingerprints through another SRO
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Agencies
[Federal Register Volume 70, Number 249 (Thursday, December 29, 2005)]
[Notices]
[Pages 77228-77230]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-8066]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53014; File No. SR-NYSE-2005-89]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To
Extend the Pilot for NYSE Direct+[reg] Until December 23, 2006
December 22, 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 December 13, 2005, 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 and
II below, which Items have been prepared by NYSE. 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.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
This proposal is to extend until December 23, 2006, the
effectiveness of the pilot (the ``Pilot'') for NYSE Direct+[supreg]
(``Direct +''). The Pilot was approved initially on a one-year basis
and extended for several additional years, and now expires on December
23, 2005.
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
In light of the fact that the Commission is still considering the
Exchange's filing on proposed enhancements to NYSE Direct+[supreg] (the
NYSE HYBRID MARKETS SM--``Hybrid Market'') as described in
SR-NYSE-2004-05 and subsequent amendments thereto \3\, the Exchange
hereby is filing to renew its Pilot, as it currently operates, for an
additional year.
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 50173 (August 10,
2004), 69 FR 50407 (August 16, 2004) (Amendment No. 1 to SR-NYSE-
2004-05); Securities Exchange Act Release No. 50667 (November 15,
2004), 69 FR 67980 (November 22, 2004) (Amendment Nos. 2 and 3 to
SR-NYSE-2004-05); (The Exchange withdrew Amendment No. 4 and
replaced it with Amendment No. 5); Securities Exchange Act Release
No. 51906 (June 22, 2005), 70 FR 37463 (June 29, 2005) (Amendment
No. 5 to SR-NYSE-2004-05). See also Amendment No. 6 to SR-NYSE-2004-
05 (September 16, 2005) and Amendment No. 7 to SR-NYSE-2004-05
(October 11, 2005).
---------------------------------------------------------------------------
Background
NYSE Direct+[supreg] was originally approved as a one-year pilot in
SR-NYSE-2000-18,\4\ ending on December 21, 2001. The Exchange then
extended the Pilot for an additional one-year, ending December 23,
2002.\5\ The Pilot was subsequently extended for an additional one-
year, ending December 23, 2003.\6\ It was again extended for two
additional one-year periods and now expires on December 23, 2005.\7\
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 43767 (December 22,
2000), 66 FR 834 (January 4, 2001) (SR-NYSE-2000-18).
\5\ See Securities Exchange Act Release No. 45331 (January 24,
2002), 67 FR 5024 (February 1, 2002) (SR-NYSE-2001-50).
\6\ See Securities Exchange Act Release No. 46906 (November 25,
2002), 67 FR 72260 (December 4, 2002) (SR-NYSE-2002-47).
\7\ See Securities Exchange Act Release No. 48772 (November 12,
2003), 68 FR 65756 (November 21, 2003) (SR-NYSE-2003-30). See
Securities Exchange Act Release No. 50828 (December 9, 2004), 69 FR
75579 (December 17, 2004) (SR-NYSE-2004-66).
---------------------------------------------------------------------------
The NYSE Direct+[supreg] pilot provides for the automatic execution
of limit orders of 1,099 shares or less (``auto ex'' orders) against
trading interest reflected in the Exchange's published quotation. It is
[[Page 77229]]
not mandatory that all limit orders of 1,099 shares be entered as auto
ex orders; rather, the member organization entering the order, or its
customer if enabled by the member organization, can choose to enter an
auto ex order when such member organization (or customer) believes that
the speed and certainty of an execution at the Exchange's published bid
or offer price is in its customer's best interest.
The Exchange proposes to extend this Pilot for an additional year
(from December 24, 2005 until December 23, 2006). Five filings which
impact NYSE Direct+[supreg] have been filed with or approved by the
Commission during the current Pilot are now part of the Pilot.\8\ These
include:
---------------------------------------------------------------------------
\8\ See telephone conversation between Steve L. Kuan, Special
Counsel, Division of Market Regulation (``Divison''), Commission,
and Jeffrey Rosenstrock, Principal Rule Counsel, NYSE, on December
21, 2005. In addition, SR-NYSE-2003-20 proposed to disengage NYSE
Direct+[supreg] in five-actively traded stocks. However, this pilot
expired on June 20, 2003 and therefore, does not impact the Pilot as
proposed to be extended. See Securities Exchange Act Release No.
47965 (June 2, 2003), 68 FR 34691 (June 10, 2003) (SR-NYSE-2003-20).
---------------------------------------------------------------------------
(a) A filing which amended Rule 1000 to provide that NYSE
Direct+[supreg] executions will not be available if the resulting trade
would be more than five cents away from the last sale.\9\ The amendment
also provided that during the process for completing Rule 127
transactions, the specialist should publish a bid and/or offer that is
more than five cents away from the last reported transaction price in
the subject security on the Exchange.
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\9\ See Securities Exchange Act Release No. 47463 (March 7,
2003), 68 FR 12122 (March 13, 2003) (SR-NYSE-2002-44).
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(b) A filing which amended Exchange Rules 13 and 1005 in order to
eliminate size and frequency restrictions for orders entered through
NYSE Direct+[reg] (``Direct +'') in Investment Company Units, as
defined in paragraph 703.16 of the Listed Company Manual, Trust Issued
Receipts (such as HOLDRs), as defined in Rule 1200, and
streetTRACKS[reg] Gold Shares, as defined in Rule 1300, (collectively
``ETFs'').\10\
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\10\ See Securities Exchange Act Release No. 52160 (July 28,
2005), 70 FR 44963 (August 4, 2005) (SR-NYSE-2005-49).
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(c) A filing which amended Rule 1002 to include ETFs and HOLDRs and
provide that ETFs trade until 4:15 p.m. and amended Rule 1005 to
reflect that the rule applies to ETFs and HOLDRs.\11\
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\11\ See Securities Exchange Act Release No. 47024 (December 18,
2002), 67 FR 79217 (December 27, 2002) (SR-NYSE-2002-37). The
expansion of the Direct+ order size eligibility described in this
filing (for up to 10,000 shares) was superseded by SR-NYSE-2005-49.
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(d) A filing which amended Rule 1005 to permit entry of limit
orders up to 1,099 shares within 30 seconds for an account in which the
same person has an interest, provided that the orders are entered from
different terminals and that the member or member organization
responsible for the entry of the orders to the trading floor
(``Floor'') has procedures to monitor compliance with the separate
terminal requirement.\12\
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\12\ See Securities Exchange Act Release No. 47353 (February 12,
2003), 68 FR 8318 (February 20, 2003) (SR-NYSE-2002-58).
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(e) A filing which amended Rules 1000 and 1001 in connection with
the NYSE LiquidityQuoteSM initiative.\13\ In conjunction
with autoquoting of bids and offers, Rule 1000 has been amended to
provide that a NYSE Direct+[supreg] order equal to or greater than the
size of the published bid/offer exhausts the entire bid/offer, rather
than decreases it to 100 shares.\14\ Rule 1001(c) provided that if
executions of auto ex orders have traded with all trading interest
reflected in the Exchange's published bid or offer, the Exchange will
disseminate a bid or offer at that price of 100 shares until the
specialist requotes that market. Rule 1001(c) has been deleted.
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\13\ See Securities Exchange Act Release No. 47614 (April 2,
2003), 68 FR 17140 (April 8, 2003) (SR-NYSE-2002-55).
\14\ See telephone conversation between Steve L. Kuan, Special
Counsel, Division, Commission, and Jeffrey Rosenstrock, Principal
Rule Counsel, NYSE, on December 21, 2005.
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The above-mentioned filings became part of the NYSE Direct+[supreg]
rules and were incorporated into the Pilot upon their respective filing
or approval by the Commission.\15\ Therefore, they are extended as part
of the Pilot.
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\15\ See id.
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If, however, the Commission approves the Hybrid Market proposal
during the extension of the Pilot period (December 24, 2005-December
23, 2006), the Hybrid Market proposal would supersede this filing.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \16\ in general, and furthers the
objectives of Section 6(b)(5) of the Act \17\ 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. The Exchange also believes that the
proposed rule change is designed to support the principles of Section
11A(a)(1) of the Act \18\ in that it seeks to assure economically
efficient execution of securities transactions, makes it practicable
for brokers to execute investors' orders in the best market and
provides an opportunity for investors' orders to be executed without
the participation of a dealer.
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\16\ 15 U.S.C. 78f(b).
\17\ 15 U.S.C. 78f(b)(5).
\18\ 15 U.S.C. 78k-1(a)(1).
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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.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule does not (i) significantly
affect the protection of investors or the public interest; (ii) impose
any significant burden on competition; and (iii) become operative for
30 days from the date on which it was filed, or such shorter time as
the Commission may designate if consistent with the protection of
investors and the public interest, provided that the self-regulatory
organization has given the Commission written notice of its intent to
file the proposed rule change at least five business days prior to the
date of filing of the proposed rule change or such shorter time as
designated by the Commission, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \19\ and Rule 19b-
4(f)(6) thereunder.\20\ 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.\21\
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\19\ 15 U.S.C. 78s(b)(3)(A).
\20\ 17 CFR 240.19b-4(f)(6).
\21\ 15 U.S.C. 78s(b)(3)(C).
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The Exchange requests that the Commission waive the five business
days pre-filing requirement and the 30-day operative delay under Rule
19b-4(f)(6)(iii).\22\ The Exchange believes that the continuation of
the Pilot is in the public interest as it will avoid
[[Page 77230]]
inconvenience and interruption to the public.
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\22\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission believes that waiver of the 30 day operative delay
is consistent with the protection of investors and the public
interest,\23\ because it will allow the Exchange to continue, without
interruption, the existing operation of the Pilot for an additional
year, while the Commission considers the Hybrid Market. Accordingly,
the Commission designates that the proposal shall become operative as
of the date of this notice.
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\23\ 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 Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NYSE-2005-89 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-NYSE-2005-89. 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 (https://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 Exchange. 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-2005-89 and should be submitted on or before
January 19, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\24\
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\24\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. E5-8066 Filed 12-28-05; 8:45 am]
BILLING CODE 8010-01-P