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]

Download as PDF 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 (http://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 (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 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. VerDate Aug<31>2005 18:56 Dec 28, 2005 Jkt 208001 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 PO 00000 Frm 00111 Fmt 4703 Sfmt 4703 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). E:\FR\FM\29DEN1.SGM 29DEN1 Federal Register / Vol. 70, No. 249 / Thursday, December 29, 2005 / Notices wwhite on PROD1PC65 with NOTICES 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. VerDate Aug<31>2005 18:56 Dec 28, 2005 Jkt 208001 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). PO 00000 Frm 00112 Fmt 4703 Sfmt 4703 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 E:\FR\FM\29DEN1.SGM 29DEN1 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 (http://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 (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 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). VerDate Aug<31>2005 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 PO 00000 Frm 00113 Fmt 4703 Sfmt 4703 deemed illegible. The text of the proposed rule change is available on NYSE’s Web site (http://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 E:\FR\FM\29DEN1.SGM 29DEN1

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]


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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.
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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).
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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\
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    \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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    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:
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    \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).
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    (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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \15\ See id.
---------------------------------------------------------------------------

    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.
---------------------------------------------------------------------------

    \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 (http://
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 (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 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