Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the New York Stock Exchange, Inc. Relating to Proposed Changes to Exchange Rules 440F (“Public Short Sale Transactions Effected on the Exchange”) and 440G (“Transactions in Stocks and Warrants for the Accounts of Members, Allied Members and Member Organizations”), 3758-3760 [E5-279]
Download as PDF
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3758
Federal Register / Vol. 70, No. 16 / Wednesday, January 26, 2005 / Notices
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing rule change
establishes or changes a due, fee, or
other charge imposed by the Exchange,
it has become effective pursuant to
section 19(b)(3)(A)(ii) of the Act 11 and
subparagraph (f)(2) of Rule 19b–4
thereunder.12 Accordingly, the proposal
will take effect upon filing with the
Commission. 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.
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 rulecomments@sec.gov. Please include File
Number SR–CBOE–2005–05 on the
subject line.
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 CBOE. 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–CBOE–2005–05 and should
be submitted on or before February 16,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–282 Filed 1–25–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51050; File No. SR–ISE–
2004–31]
Self-Regulatory Organizations;
International Securities Exchange, Inc.;
Order Granting Approval of Proposed
Rule Change and Amendment No. 1
Thereto Relating to System-Assisted
Quotation Services
January 18, 2005.
On September 30, 2004, the
Paper Comments
International Securities Exchange, Inc.
(‘‘ISE’’ or ‘‘Exchange’’) submitted to the
• Send paper comments in triplicate
Securities and Exchange Commission
to Jonathan G. Katz, Secretary,
(‘‘Commission’’), pursuant to Section
Securities and Exchange Commission,
19(b)(1) of the Securities Exchange Act
450 Fifth Street, NW., Washington, DC
of 1934 (‘‘Act’’) 1 and Rule 19b–4
20549–0609.
thereunder,2 a proposed rule change to
All submissions should refer to File
codify in the ISE’s rules certain services
Number SR–CBOE–2005–05. This file
the ISE offers market makers to help
number should be included on the
subject line if e-mail is used. To help the them manage their quotations. On
November 16, 2004, the ISE submitted
Commission process and review your
Amendment No.1 to the proposed rule
comments more efficiently, please use
only one method. The Commission will change. The proposed rule change, as
post all comments on the Commission’s modified by Amendment No. 1, was
published for comment in the Federal
Internet Web site (https://www.sec.gov/
Register on December 14, 2004.3 The
rules/sro.shtml). Copies of the
Commission received no comments on
submission, all subsequent
the proposed rule change.
amendments, all written statements
After careful consideration, the
with respect to the proposed rule
Commission finds that the proposed
change that are filed with the
rule change is consistent with the
Commission, and all written
requirements of the Act and the rules
communications relating to the
and regulations thereunder that are
proposed rule change between the
Commission and any person, other than applicable to a national securities
those that may be withheld from the
13 17 CFR 200.30–3(a)(12).
public in accordance with the
1 15 U.S.C. 78s(b)(1).
provisions of 5 U.S.C. 552, will be
2 17 CFR 240.19b–4.
3 Securities Exchange Act Release No. 50813
(December 7, 2004), 69 FR 74551 (December 14,
2004).
11 15
U.S.C. 78s(b)(3)(A)(ii).
12 17 CFR 240.19b–4(f)(2).
VerDate jul<14>2003
19:33 Jan 25, 2005
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Fmt 4703
Sfmt 4703
exchange.4 In particular, the
Commission believes that the proposed
rule change is consistent with Section
6(b)(5) of the Act,5 which requires
among other things, that the rules of the
Exchange 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 notes
that the proposal does not alter the
obligations of ISE market makers. The
proposed rule change codifies ISE
system functionality which should
provide ISE market makers assistance in
effectively managing their quotations.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,6 that the
proposed rule change (SR–ISE–2004–31)
be, and it hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.7
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–280 Filed 1–25–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51054; File No. SR–NYSE–
2005–07]
Self-Regulatory Organizations; Notice
of Filing of Proposed Rule Change by
the New York Stock Exchange, Inc.
Relating to Proposed Changes to
Exchange Rules 440F (‘‘Public Short
Sale Transactions Effected on the
Exchange’’) and 440G (‘‘Transactions
in Stocks and Warrants for the
Accounts of Members, Allied Members
and Member Organizations’’)
January 18, 2005.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Exchange Act’’),2 and Rule 19b–4
thereunder,3 notice is hereby given that
on January 11, 2005, the New York
Stock Exchange, Inc. (the ‘‘NYSE’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission (the ‘‘SEC’’
or the ‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
4 In approving this proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
5 15 U.S.C. 78f(b)(5).
6 15 U.S.C. 78s(b)(2).
7 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a et seq.
3 17 CFR 240.19b–4.
E:\FR\FM\26JAN1.SGM
26JAN1
Federal Register / Vol. 70, No. 16 / Wednesday, January 26, 2005 / Notices
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 NYSE is filing with the SEC
proposed amendments to Exchange
Rules 440F (‘‘Public Short Sale
Transactions Effected on the Exchange’’)
and 440G (‘‘Transactions in Stocks and
Warrants for the Accounts of Members,
Allied Members and Member
Organizations’’) to include certain shortexempt sales on Reports of Short
Interest (i.e., Forms SS20 and 121). The
text of the proposed amendments is
available from the NYSE and the
Commission.4
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
Exchange Rule 440F requires
members and member organizations to
report round-lot short sale transactions
for public customers on Form SS20.
Exchange Rule 440G requires members
and member organizations to report
round-lot short sale transactions for
members, allied members or member
organizations on Form 121. Rule
440F.10 (‘‘Requirements for filing’’) and
440G.10 (‘‘Requirements for filing’’) also
provide ‘‘General Instructions’’ to
complete ‘‘Reports on Form SS20’’ and
‘‘Reports on Form 121,’’ respectively.
Currently, short-exempt sales are
excluded when computing the total
short interest on the forms, under Rules
440F and 440G, respectively. However,
the SEC greatly increased the number of
short-exempt sales transactions when
they adopted Regulation SHO.
4 Both Exhibits A and B are available at https://
www.nyse.com/regulation/ and https://www.sec.gov/
rules/sro.shtml.
VerDate jul<14>2003
19:33 Jan 25, 2005
Jkt 205001
Concurrently with the adoption of
Regulation SHO, the SEC issued the
Pilot Order 5 providing for a one-year
Pilot program under which the
provisions of Rule 10a–1 and any SRO
short sale price test, including the tick
test contained in Exchange Rule 440B,
are suspended. Subsequently, on
November 29, 2004, the SEC issued a
Second Pilot Order 6 postponing its
previously announced one-year pilot
suspending the provisions of Rule 10a–
1 and any short sale price test of any
exchange or national securities
association for short sales of designated
securities.
The Pilot was established as part of
the SEC’s review of short sale
regulations in conjunction with the
adoption of Regulation SHO. Pursuant
to Regulation SHO, broker-dealers are
required to mark short sale orders of
securities enumerated in the Pilot Order
effected during any Pilot period as
‘‘short exempt’’ so that such orders are
not subject to price tests. A large
number of broker-dealers had informed
the Commission that it would be
inefficient and very costly for them to
comply with this marking requirement
for Pilot stocks, requiring significant
systems changes for both firms and
customers. In addition, these brokerdealers had raised the possibility that
these significant systems changes may
be in effect for only the duration of the
one-year Pilot. As a result, the
Exchange, along with other market
centers, have agreed to ‘‘mask’’ short
sale orders in Pilot stocks for the
duration of the Pilot, as it would be
more efficient than having brokerdealers and their customers make the
changes. However, as it would take
some time to make necessary changes to
the various market centers systems, the
market centers will not be able to
‘‘mask’’ orders until May 2, 2005. As a
result, the Commission issued the
Second Pilot Order extending the
implementation of the Pilot until that
date.
The Pilot is now scheduled to begin
on May 2, 2005 and end on April 28,
2006. All other terms of the Pilot Order 7
5 See Securities Exchange Act Release No. 50104
(July 28, 2004), 69 FR 48032 (August 6, 2004).
6 See Securities Exchange Act Release No. 50747
(November 29, 2004) (‘‘Second Pilot Order’’),
available at https://www.sec.gov/rules/other/34–
50747.htm.
7 See Securities Exchange Act Release No. 50104
(July 28, 2004), 69 FR 48032 (August 6, 2004)
(‘‘Pilot Order’’), available at https://www.sec.gov/
rules/other/34–50104.htm. The Pilot Order
provided for a one-year pilot program (‘‘Pilot
Program’’), under which the provisions of Rule 10a–
1 and any self-regulatory organization (‘‘SRO’’)
short sale price test, including the tick test
contained in Exchange Rule 440B, are suspended
PO 00000
Frm 00090
Fmt 4703
Sfmt 4703
3759
remain unchanged,8 which requires
these Pilot ‘‘designated securities’’ to be
marked ‘‘short-exempt’’ sales.
Accordingly, the Exchange proposes to
amend the instructions to Forms SS20
and 121, pursuant to Rules 440F and
440G to include these certain shortexempt sales on Reports of Short
Interest.
The Exchange is proposing
amendments to Rules 440F.10 and
440G.10 to conform the instructions to
Forms SS20 and 121, respectively, to
the Pilot Order. The purpose of Rules
440F and 440G is to capture short
interest for reporting purposes, which is
meant to include the designated
securities subject to the Pilot Order—
regardless as to whether they are
marked ‘‘short-exempt.’’ In addition, the
Exchange is proposing some minor
amendments to the rules to remove
obsolete references.
(1) Statutory Basis
The statutory basis for the proposed
rule change is Sections 6(b)(5) 9 and
17A 10 of the Exchange Act which
require, among other things, that the
rules of the Exchange are designed to
prevent fraudulent and manipulative
acts and practices, 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
perfect the mechanism of a free and
open market and national market
system, and in general to protect
investors and the public interest; and
the prompt and accurate clearance and
settlement of securities transactions.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
for short sales in: (1) Certain ‘‘designated securities’’
identified in Appendix A to the SEC’s Pilot Order;
(2) any security included in the Russell 1000 Index
effected between 4:15 p.m. e.s.t. and the open of the
consolidated tape on the following day; and (3) any
security not included in (1) and (2) above effected
in the period between the close of the consolidated
tape (i.e., after 8 p.m. e.s.t.) and the open of the
consolidated tape the following day. During the
Pilot, all other provisions of Rule 10a–1 and
Regulation SHO—including the marking, locate and
delivery requirements—remain in effect. The SEC
also noted in the Pilot Order that SROs, including
the Exchange, would actively monitor trading in the
Pilot Program securities to identify any abusive
short selling.
8 See SEC, Division of Market of Regulation,
Responses to Frequently Asked Questions
Concerning Regulation SHO (December 17, 2004),
available at https://www.sec.gov/divisions/
marketreg/mrfaqregsho1204.htm.
9 9 15 U.S.C. 78f(b)(5).
10 15 U.S.C. 78q–1.
E:\FR\FM\26JAN1.SGM
26JAN1
3760
Federal Register / Vol. 70, No. 16 / Wednesday, January 26, 2005 / Notices
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Exchange 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
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: (a) By order approve
such proposed rule change, or (b)
institute proceedings to determine
whether the proposed rule change
should be disapproved.
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
submission should refer to File Number
SR–NYSE–2005–07 and should be
submitted on or before February 16,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–279 Filed 1–25–05; 8:45 am]
BILLING CODE 8010–01–P
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:
SOCIAL SECURITY ADMINISTRATION
The Ticket To Work and Work
Incentives Advisory Panel Meeting
AGENCY:
Social Security Administration
(SSA).
ACTION:
Notice of meetings.
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2005–07 in 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–2005–07. This file
number should be included on the
subject line of 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
VerDate jul<14>2003
19:33 Jan 25, 2005
Jkt 205001
DATES:
February 23, 2005, 9 a.m.–5 p.m.
February 24, 2005, 9 a.m.–6 p.m.*
February 25, 2005, 9 a.m.–1 p.m.
*The full deliberative panel meeting
ends at 5 p.m. The standing committees
of the Panel will meet from 5 p.m. until
6 p.m.
ADDRESSES: Hotel Monaco, 333 St.
Charles Ave., New Orleans, LA 70130.
SUPPLEMENTARY INFORMATION:
Type of meeting: This is a quarterly
meeting open to the public. The public
is invited to participate by coming to the
address listed above. Public comment
will be taken during the quarterly
meeting. The public is also invited to
submit comments in writing on the
implementation of the Ticket to Work
and Work Incentives Improvement Act
(TWWIIA) of 1999 at any time.
Purpose: In accordance with section
10(a)(2) of the Federal Advisory
Committee Act, the Social Security
Administration (SSA) announces a
meeting of the Ticket to Work and Work
Incentives Advisory Panel (the Panel).
Section 101(f) of Public Law 106–170
PO 00000
11 17
CFR 200.30–3(a)(12).
Frm 00091
Fmt 4703
Sfmt 4703
establishes the Panel to advise the
President, the Congress, and the
Commissioner of SSA on issues related
to work incentives programs, planning,
and assistance for individuals with
disabilities as provided under section
101(f)(2)(A) of the TWWIIA. The Panel
is also to advise the Commissioner on
matters specified in section 101(f)(2)(B)
of that Act, including certain issues
related to the Ticket to Work and SelfSufficiency Program established under
section 101(a) of that Act.
Interested parties are invited to attend
the meeting. The Panel will use the
meeting time to receive briefings, hear
presentations, conduct full Panel
deliberations on the implementation of
TWWIIA, and receive public testimony.
The Panel will meet in person
commencing on Wednesday, February
23, 2005 from 9 a.m. to 5 p.m. Thursday,
February 24, 2005 from 9 a.m. to 5 p.m.
(standing committee meetings from 5
p.m. to 6 p.m.); and Friday, February 25,
2005 from 9 a.m. to 1 p.m.
Agenda: The Panel will hold a
quarterly meeting. Briefings from Social
Security, presentations on Medicaid and
Medicare, full Panel deliberations and
other Panel business will be held
Wednesday, Thursday, and Friday,
February 23, 24, and 25, 2005. Public
testimony will be heard in person
Wednesday, February 23, 2005 from 3
p.m. to 3:30 p.m. and on Friday,
February 25, 2005 from 9 a.m. to 9:30
a.m. Members of the public must
schedule a timeslot in order to
comment. In the event that the public
comments do not take up the scheduled
time period for public comment, the
Panel will use that time to deliberate
and conduct other Panel business.
Individuals interested in providing
testimony in person should contact the
Panel staff as outlined below to
schedule time slots. Each presenter will
be called on by the Chair in the order
in which they are scheduled to testify
and is limited to a maximum fiveminute verbal presentation. Full written
testimony on TWWIIA Implementation,
no longer than 5 pages, may be
submitted in person or by mail, fax or
email on an on-going basis to the Panel
for consideration.
Since seating may be limited, persons
interested in providing testimony at the
meeting should contact the Panel staff
by e-mailing Shirletta Banks, at
Shirletta.Banks@socialsecurity.gov or
calling (202) 358–6430.
The full agenda for the meeting will
be posted on the Internet at https://
www.socialsecurity.gov/work/panel
approximately one week before the
meeting or can be received in advance
electronically or by fax upon request.
E:\FR\FM\26JAN1.SGM
26JAN1
]]>Agencies
[Federal Register Volume 70, Number 16 (Wednesday, January 26, 2005)]
[Notices]
[Pages 3758-3760]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-279]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51054; File No. SR-NYSE-2005-07]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change by the New York Stock Exchange, Inc. Relating to Proposed
Changes to Exchange Rules 440F (``Public Short Sale Transactions
Effected on the Exchange'') and 440G (``Transactions in Stocks and
Warrants for the Accounts of Members, Allied Members and Member
Organizations'')
January 18, 2005.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Exchange Act''),\2\ and Rule 19b-4 thereunder,\3\ notice is
hereby given that on January 11, 2005, the New York Stock Exchange,
Inc. (the ``NYSE'' or the ``Exchange'') filed with the Securities and
Exchange Commission (the ``SEC'' or the ``Commission'') the proposed
rule change as described in Items I, II, and III below, which Items
have been
[[Page 3759]]
prepared by the Exchange. 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\ 15 U.S.C. 78a et seq.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The NYSE is filing with the SEC proposed amendments to Exchange
Rules 440F (``Public Short Sale Transactions Effected on the
Exchange'') and 440G (``Transactions in Stocks and Warrants for the
Accounts of Members, Allied Members and Member Organizations'') to
include certain short-exempt sales on Reports of Short Interest (i.e.,
Forms SS20 and 121). The text of the proposed amendments is available
from the NYSE and the Commission.\4\
---------------------------------------------------------------------------
\4\ Both Exhibits A and B are available at https://www.nyse.com/
regulation/ and https://www.sec.gov/rules/sro.shtml.
---------------------------------------------------------------------------
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
Exchange Rule 440F requires members and member organizations to
report round-lot short sale transactions for public customers on Form
SS20. Exchange Rule 440G requires members and member organizations to
report round-lot short sale transactions for members, allied members or
member organizations on Form 121. Rule 440F.10 (``Requirements for
filing'') and 440G.10 (``Requirements for filing'') also provide
``General Instructions'' to complete ``Reports on Form SS20'' and
``Reports on Form 121,'' respectively.
Currently, short-exempt sales are excluded when computing the total
short interest on the forms, under Rules 440F and 440G, respectively.
However, the SEC greatly increased the number of short-exempt sales
transactions when they adopted Regulation SHO. Concurrently with the
adoption of Regulation SHO, the SEC issued the Pilot Order \5\
providing for a one-year Pilot program under which the provisions of
Rule 10a-1 and any SRO short sale price test, including the tick test
contained in Exchange Rule 440B, are suspended. Subsequently, on
November 29, 2004, the SEC issued a Second Pilot Order \6\ postponing
its previously announced one-year pilot suspending the provisions of
Rule 10a-1 and any short sale price test of any exchange or national
securities association for short sales of designated securities.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 50104 (July 28,
2004), 69 FR 48032 (August 6, 2004).
\6\ See Securities Exchange Act Release No. 50747 (November 29,
2004) (``Second Pilot Order''), available at https://www.sec.gov/
rules/other/34-50747.htm.
---------------------------------------------------------------------------
The Pilot was established as part of the SEC's review of short sale
regulations in conjunction with the adoption of Regulation SHO.
Pursuant to Regulation SHO, broker-dealers are required to mark short
sale orders of securities enumerated in the Pilot Order effected during
any Pilot period as ``short exempt'' so that such orders are not
subject to price tests. A large number of broker-dealers had informed
the Commission that it would be inefficient and very costly for them to
comply with this marking requirement for Pilot stocks, requiring
significant systems changes for both firms and customers. In addition,
these broker-dealers had raised the possibility that these significant
systems changes may be in effect for only the duration of the one-year
Pilot. As a result, the Exchange, along with other market centers, have
agreed to ``mask'' short sale orders in Pilot stocks for the duration
of the Pilot, as it would be more efficient than having broker-dealers
and their customers make the changes. However, as it would take some
time to make necessary changes to the various market centers systems,
the market centers will not be able to ``mask'' orders until May 2,
2005. As a result, the Commission issued the Second Pilot Order
extending the implementation of the Pilot until that date.
The Pilot is now scheduled to begin on May 2, 2005 and end on April
28, 2006. All other terms of the Pilot Order \7\ remain unchanged,\8\
which requires these Pilot ``designated securities'' to be marked
``short-exempt'' sales. Accordingly, the Exchange proposes to amend the
instructions to Forms SS20 and 121, pursuant to Rules 440F and 440G to
include these certain short-exempt sales on Reports of Short Interest.
---------------------------------------------------------------------------
\7\ See Securities Exchange Act Release No. 50104 (July 28,
2004), 69 FR 48032 (August 6, 2004) (``Pilot Order''), available at
https://www.sec.gov/rules/other/34-50104.htm. The Pilot Order
provided for a one-year pilot program (``Pilot Program''), under
which the provisions of Rule 10a-1 and any self-regulatory
organization (``SRO'') short sale price test, including the tick
test contained in Exchange Rule 440B, are suspended for short sales
in: (1) Certain ``designated securities'' identified in Appendix A
to the SEC's Pilot Order; (2) any security included in the Russell
1000 Index effected between 4:15 p.m. e.s.t. and the open of the
consolidated tape on the following day; and (3) any security not
included in (1) and (2) above effected in the period between the
close of the consolidated tape (i.e., after 8 p.m. e.s.t.) and the
open of the consolidated tape the following day. During the Pilot,
all other provisions of Rule 10a-1 and Regulation SHO--including the
marking, locate and delivery requirements--remain in effect. The SEC
also noted in the Pilot Order that SROs, including the Exchange,
would actively monitor trading in the Pilot Program securities to
identify any abusive short selling.
\8\ See SEC, Division of Market of Regulation, Responses to
Frequently Asked Questions Concerning Regulation SHO (December 17,
2004), available at https://www.sec.gov/divisions/marketreg/
mrfaqregsho1204.htm.
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The Exchange is proposing amendments to Rules 440F.10 and 440G.10
to conform the instructions to Forms SS20 and 121, respectively, to the
Pilot Order. The purpose of Rules 440F and 440G is to capture short
interest for reporting purposes, which is meant to include the
designated securities subject to the Pilot Order--regardless as to
whether they are marked ``short-exempt.'' In addition, the Exchange is
proposing some minor amendments to the rules to remove obsolete
references.
(1) Statutory Basis
The statutory basis for the proposed rule change is Sections
6(b)(5) \9\ and 17A \10\ of the Exchange Act which require, among other
things, that the rules of the Exchange are designed to prevent
fraudulent and manipulative acts and practices, 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 perfect the mechanism of a free
and open market and national market system, and in general to protect
investors and the public interest; and the prompt and accurate
clearance and settlement of securities transactions.
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\9\ 9 15 U.S.C. 78f(b)(5).
\10\ 15 U.S.C. 78q-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
[[Page 3760]]
any burden on competition not necessary or appropriate in furtherance
of the purposes of the Exchange 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
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: (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 (https://
www.sec.gov/rules/sro.shtml); or
Send e-mail to rule-comments@sec.gov. Please include File
Number SR-NYSE-2005-07 in 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-2005-07. This
file number should be included on the subject line of 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 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 submission should refer to
File Number SR-NYSE-2005-07 and should be submitted on or before
February 16, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-279 Filed 1-25-05; 8:45 am]
BILLING CODE 8010-01-P
