Self-Regulatory Organizations; New York Stock Exchange, Inc.; Order Approving Proposed Rule Change To Amend NYSE Rule 80A (Index Arbitrage Trading Restrictions) To Calculate Limitations on Index Arbitrage Trading Based on the NYSE Composite Index, 51398 [E5-4724]

Download as PDF 51398 Federal Register / Vol. 70, No. 167 / Tuesday, August 30, 2005 / Notices arbitrators. Although it is clear under NASD rules that persons who are registered through a broker or a dealer are associated persons of that brokerdealer, is this amendment helpful? 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 rulecomments@sec.gov. Please include File Number SR–NASD–2005–094 on the subject line. SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52328; File No. SR–NYSE– 2005–45] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Order Approving Proposed Rule Change To Amend NYSE Rule 80A (Index Arbitrage Trading Restrictions) To Calculate Limitations on Index Arbitrage Trading Based on the NYSE Composite Index August 24, 2005. On June 28, 2005, the New York Stock Exchange, Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange • Send paper comments in triplicate Commission (‘‘Commission’’), pursuant to Jonathan G. Katz, Secretary, to Section 19(b)(1) of the Securities Securities and Exchange Commission, Exchange Act of 1934 (‘‘Act’’),1 and 100 F Street, NE., Washington, DC Rule 19b–4 thereunder,2 a proposed rule 20549–2001. change to amend NYSE Rule 80A (Index All submissions should refer to File Arbitrage Trading Restrictions) relating Number SR–NASD–2005–094. This file to limitations on index arbitrage trading. number should be included on the subject line if e-mail is used. To help the The proposed rule change was published for comment in the Federal Commission process and review your Register on July 25, 2005.3 The comments more efficiently, please use only one method. The Commission will Commission received no comments on post all comments on the Commission’s the proposal. This order approves the proposed rule change. Internet Web site (http://www.sec.gov/ Current NYSE Rule 80A provides for rules/sro.shtml). Copies of the limitations on index arbitrage trading in submission, all subsequent any component stock of the S&P 500 amendments, all written statements Stock Price Index on any day that the with respect to the proposed rule Dow Jones Industrial Average (‘‘DJIA’’) 4 change that are filed with the advances or declines at least 2% 5 from Commission, and all written its previous day’s closing value.6 The communications relating to the NYSE proposes to amend NYSE Rule proposed rule change between the Commission and any person, other than 80A to calculate the limitations on index arbitrage trading as provided in those that may be withheld from the the rule based on the average closing public in accordance with the value of the NYSE Composite Index provisions of 5 U.S.C. 552, will be (‘‘NYA’’), replacing the current usage of available for inspection and copying at the DJIA. the Commission’s Public Reference The Commission finds that the Room. Copies of such filing also will be proposed rule change is consistent with available for inspection and copying at the requirements of the Act and the the principal office of NASD. All rules and regulations thereunder comments received will be posted applicable to a national securities without change; the Commission does not edit personal identifying 1 15 U.S.C. 78s(b)(1). information from submissions. You 2 17 CFR 240.19b–4. should submit only information that 3 Securities Exchange Act Release No. 52051 (July you wish to make available publicly. All 18, 2005), 70 FR 42608. submissions should refer to the File 4 ‘‘Dow Jones Industrial Average’’ is a service mark of Dow Jones & Company, Inc. Number SR–NASD–2005–094 and 5 Current NYSE Rule 80A provides that collars are should be submitted on or before based on a quarterly calculation of ‘‘two percent September 20, 2005. Paper Comments For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–4726 Filed 8–29–05; 8:45 am] BILLING CODE 8010–01–P 11 17 CFR 200.30–3(a)(12). VerDate Aug<18>2005 15:17 Aug 29, 2005 Jkt 205001 value,’’ which is 2%, rounded down to the nearest ten points, of the average closing value of the DJIA for the last month of the previous calendar quarter. 6 NYSE Rule 80A’s current limitations on index arbitrage trading provide that if the market advances by 2% or more, all index arbitrage orders to buy must be stabilizing (buy minus); similarly, if the market declines by 2% or more, all index arbitrage orders to sell must be stabilizing (sell plus). The stabilizing requirements are removed if the DJIA moves back to or within 1% of its closing value. PO 00000 Frm 00071 Fmt 4703 Sfmt 4703 exchange 7 and, in particular, the requirements of Section 6 of the Act 8 and the rules and regulations thereunder. Specifically, the Commission finds the proposal to be consistent with Section 6(b)(5) of the Act,9 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. According to the Exchange, the NYA is a better reflection of market activity with respect to the S&P 500 and thus, a better indicator as to when the restrictions on index arbitrage trading provided by NYSE Rule 80A should be triggered. Therefore, the Commission believes that it is consistent with the Act for the NYSE to amend NYSE Rule 80A to calculate limitations on index arbitrage trading based on the NYA.10 It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (SR–NYSE–2005– 45) be, and it hereby is, approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–4724 Filed 8–29–05; 8:45 am] BILLING CODE 8010–01–P UNITED STATES SENTENCING COMMISSION Sentencing Guidelines for United States Courts United States Sentencing Commission. ACTION: Notice of final priorities. AGENCY: 7 In approving this proposed rule change, the Commission has considered the proposed rule’s impact on efficiency, competition and capital formation. See 15 U.S.C. 78c(f). 8 15 U.S.C. 78f. 9 15 U.S.C. 78f(b)(5). 10 The Commission notes that approval of the proposed rule change is based, in part, on the fact that NYSE Rule 80A affects only certain types of trading by NYSE members trading on the floor of the Exchange. The rule’s cross-market implications are minimal. The Commission, therefore, believes that the NYSE should have considerable discretion in determining which index to apply under this rule. The Commission’s approval of the proposed rule change should in no way be interpreted as an indication that a similar change to NYSE Rule 80B (Trading Halts Due to Extraordinary Market Volatility), which is integral to the cross-market trading halt procedures known as ‘‘Circuit Breakers,’’ would be subject to the same analysis or similarly approved by the Commission. 11 15 U.S.C. 78s(b)(2). 12 17 CFR 200.30–3(a)(12). E:\FR\FM\30AUN1.SGM 30AUN1

Agencies

[Federal Register Volume 70, Number 167 (Tuesday, August 30, 2005)]
[Notices]
[Page 51398]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-4724]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52328; File No. SR-NYSE-2005-45]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Approving Proposed Rule Change To Amend NYSE Rule 80A (Index 
Arbitrage Trading Restrictions) To Calculate Limitations on Index 
Arbitrage Trading Based on the NYSE Composite Index

August 24, 2005.
    On June 28, 2005, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to amend NYSE Rule 80A (Index Arbitrage Trading 
Restrictions) relating to limitations on index arbitrage trading. The 
proposed rule change was published for comment in the Federal Register 
on July 25, 2005.\3\ The Commission received no comments on the 
proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 52051 (July 18, 2005), 
70 FR 42608.
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    Current NYSE Rule 80A provides for limitations on index arbitrage 
trading in any component stock of the S&P 500 Stock Price Index on any 
day that the Dow Jones Industrial Average (``DJIA'') \4\ advances or 
declines at least 2% \5\ from its previous day's closing value.\6\ The 
NYSE proposes to amend NYSE Rule 80A to calculate the limitations on 
index arbitrage trading as provided in the rule based on the average 
closing value of the NYSE Composite Index[supreg] (``NYA''), replacing 
the current usage of the DJIA.
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    \4\ ``Dow Jones Industrial Average'' is a service mark of Dow 
Jones & Company, Inc.
    \5\ Current NYSE Rule 80A provides that collars are based on a 
quarterly calculation of ``two percent value,'' which is 2%, rounded 
down to the nearest ten points, of the average closing value of the 
DJIA for the last month of the previous calendar quarter.
    \6\ NYSE Rule 80A's current limitations on index arbitrage 
trading provide that if the market advances by 2% or more, all index 
arbitrage orders to buy must be stabilizing (buy minus); similarly, 
if the market declines by 2% or more, all index arbitrage orders to 
sell must be stabilizing (sell plus). The stabilizing requirements 
are removed if the DJIA moves back to or within 1% of its closing 
value.
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    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange \7\ and, in 
particular, the requirements of Section 6 of the Act \8\ and the rules 
and regulations thereunder. Specifically, the Commission finds the 
proposal to be consistent with Section 6(b)(5) of the Act,\9\ 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. According to the Exchange, the NYA 
is a better reflection of market activity with respect to the S&P 500 
and thus, a better indicator as to when the restrictions on index 
arbitrage trading provided by NYSE Rule 80A should be triggered. 
Therefore, the Commission believes that it is consistent with the Act 
for the NYSE to amend NYSE Rule 80A to calculate limitations on index 
arbitrage trading based on the NYA.\10\
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    \7\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition and 
capital formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f.
    \9\ 15 U.S.C. 78f(b)(5).
    \10\ The Commission notes that approval of the proposed rule 
change is based, in part, on the fact that NYSE Rule 80A affects 
only certain types of trading by NYSE members trading on the floor 
of the Exchange. The rule's cross-market implications are minimal. 
The Commission, therefore, believes that the NYSE should have 
considerable discretion in determining which index to apply under 
this rule. The Commission's approval of the proposed rule change 
should in no way be interpreted as an indication that a similar 
change to NYSE Rule 80B (Trading Halts Due to Extraordinary Market 
Volatility), which is integral to the cross-market trading halt 
procedures known as ``Circuit Breakers,'' would be subject to the 
same analysis or similarly approved by the Commission.
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-NYSE-2005-45) be, and it 
hereby is, approved.
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    \11\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4724 Filed 8-29-05; 8:45 am]
BILLING CODE 8010-01-P