Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change Relating to Exchange Rule 104(d) Governing Specialist Trading in the NYSE Hybrid Market, 28398-28399 [E6-7392]
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Federal Register / Vol. 71, No. 94 / Tuesday, May 16, 2006 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E6–7454 Filed 5–15–06; 8:45 am]
of the market as the reserve interest. The
text of the proposed rule change is
available on the Exchange’s Web site
(https://www.nyse.com), at the
Exchange’s Office of Secretary, and at
the Commission’s Public Reference
Room.
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53780; File No. SR–NYSE–
2006–24]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change
Relating to Exchange Rule 104(d)
Governing Specialist Trading in the
NYSE Hybrid Market
May 10, 2006.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on April 7,
2006, the New York Stock Exchange
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I, II, and III below, which Items
have been prepared by the 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 Exchange proposes to amend
Exchange Rule 104(d) governing
specialist trading in the NYSE HYBRID
MARKET SM (‘‘Hybrid Market’’).3
Specifically, the Exchange proposes to
amend Exchange Rule 104(d) to provide
that specialists shall have the ability to
maintain undisplayed reserve interest
on behalf of the dealer account at the
Exchange best bid and offer, provided at
least 1,000 shares of dealer interest is
displayed at that price, on the same side
16 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 On March 22, 2006, the Commission approved
the Exchange’s proposal to establish a ‘‘Hybrid
Market.’’ See Securities Exchange Act Release No.
53539, 71 FR 16353 (March 31, 2006) (‘‘Hybrid
Market Approval Order’’). In the Hybrid Market
Approval Order, the Commission approved the
Exchange’s plan to implement the Hybrid Market in
multiple phases. To date, the Exchange has not
implemented the approved changes to Exchange
Rule 104(d). The Commission notes that in this
proposal, the Exchange proposes to amend the text
of Rule 104(d) as approved in the Hybrid Market
Approval Order. Further, the Commission notes
that the Exchange’s description of Rule 104(d)
herein refers to the approved text of Rule 104(d).
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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. 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
The Exchange notes that the Hybrid
Market was approved by the
Commission on March 22, 2006.4 In the
Hybrid Market, Exchange Rule 104(d)
provides that specialists may, but are
not required to, have non-displayed
‘‘reserve’’ interest at the best bid and
offer. Reserve interest is interest at the
best bid or offer that is not displayed.
Reserve interest will participate in
automatic executions after displayed
interest on that side trades. Currently,
the specialist must have a minimum
amount of 2,000 shares displayed at the
best bid or offer in order to have reserve
interest on that side of the quote. Floor
brokers also are permitted to have
reserve interest.5 However, Floor
brokers are only required to display
1,000 shares at the best bid or offer in
order to have reserve interest.
Accordingly, the Exchange proposes to
conform the minimum display
requirements for reserve interest for
specialists and Floor brokers. Therefore,
the Exchange proposes to amend
Exchange Rule 104(d)(i) to provide that
specialists shall have the ability to
maintain undisplayed reserve interest
on behalf of the dealer account at the
Exchange best bid and offer, provided at
least 1,000 shares of dealer interest is
displayed at that price, on the same side
of the market as the reserve interest.
In addition, the Exchange proposes to
amend Exchange Rule 104(d)(ii) to
4 See Securities Exchange Act Release No. 53539
(March 22, 2006), 71 FR 16353 (March 31, 2006)
(SR–NYSE–2004–05).
5 See Exchange Rule 70.20(c)(ii).
PO 00000
Frm 00103
Fmt 4703
Sfmt 4703
conform it to the 1,000 share minimum
display requirement. Thus, this rule will
require that after an execution, if
specialist interest remains at the best
bid or offer, the amount of such
displayed interest will be replenished
by the specialist’s reserve interest, if
any, so that at least a minimum of 1,000
shares (instead of the current 2,000
shares) of specialist interest is displayed
or whatever specialist interest remains
at the best bid or offer, if less than 1,000
shares (instead of the current 2,000
shares).
The Exchange believes that it is best
to have a uniform standard for the
minimum amount of interest required to
be displayed at the best bid or offer in
order to have reserve interest as it will
deter market participants from trying to
deduce if a certain amount of liquidity
on the Display Book is associated with
a Floor broker versus a specialist.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
section 6(b)(5) of the Act 6 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 believes
that the proposed rule change also is
designed to support the principles of
section 11A(a)(1) of the Act 7 in that it
seeks to assure economically efficient
execution of securities transactions,
make it practicable for brokers to
execute investors’ orders in the best
market, and provide 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.
6 15
7 15
U.S.C. 78f(b)(5).
U.S.C. 78k–1(a)(1).
E:\FR\FM\16MYN1.SGM
16MYN1
Federal Register / Vol. 71, No. 94 / Tuesday, May 16, 2006 / Notices
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 self-regulatory
organization consents, the Commission
will:
(A) By order approve such proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change 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–NYSE–2006–24 on the
subject line.
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–2006–24 and should
be submitted on or before June 6, 2006.
national best bid or offer without
requiring that they obtain Floor Official
approval.
The text of the proposed rule change
is below. Proposed new language is in
italics; proposed deletions are in
[brackets].
*
*
*
*
*
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.8
Nancy M. Morris,
Secretary.
[FR Doc. E6–7392 Filed 5–15–06; 8:45 am]
Rule 104
No change in (a) through .10(4)
(5)(i) Transactions on the Exchange
for his own account of a member acting
as specialist are to be effected in a
reasonable and orderly manner in
relation to the condition of the general
market, the market in the particular
stock and the adequacy of the
specialist’s position to the immediate
and reasonably anticipated needs of the
round-lot and the odd-lot market. The
following types of transactions to
establish or increase a position are not
to be effected except when they are
reasonably necessary to render the
specialist’s position adequate to such
needs:
(A) A purchase at a price above the
last sale in the same session:
(B) The purchase of more than 50% of
the stock offered in the market at a price
equal to the last sale where such
transaction would be on a ‘‘zero plus
tic’’ (i.e., the last sale price was above
the previous different regular way sale
price); and
(C) Failing to reoffer or rebid where
necessary after effecting transactions
described in (A) and (B) above.
Transactions of these types may,
nevertheless, be effected with the
approval of a Floor Official or in less
active markets where they are an
essential part of a proper course of
dealings and where the amount of stock
involved and the price change, if any,
are normal in relation to the market.
(ii) Notwithstanding the provisions of
subparagraphs (5)(i)(A) and (B) above,
whenever a specialist effects a principal
purchase of a [speciality] specialty
stock, in another participating market
center through ITS, at or above the price
at which he holds orders to sell that
stock, such orders which remain
unexecuted on the Floor must be filled
by the specialist buying the stock for his
own account, at the same price at which
he effected his principal transaction
through ITS unless, effecting such a
principal transaction on the Floor, at
that price, would (a) be inconsistent
with the maintenance of fair and orderly
markets; or (b) result in the election of
stop orders.
(iii) Whenever a specialist effects a
principal sale of a specialty stock, in
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53782; File No. SR–NYSE–
2006–07]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Rule Change and
Amendment No. 1 Thereto To Amend
Exchange Rule 104 Regarding the
Requirement That Specialists Obtain
Floor Official Approval for
Destabilizing Dealer Account
Transactions That Match the National
Best Bid or Offer
May 10, 2006.
Pursuant to section 19(b)(1) of the
Securities Exchange Act of 1934 (the
• Send paper comments in triplicate
‘‘Act’’),1 and Rule 19b–4 thereunder,2
to Nancy M. Morris, Secretary,
notice is hereby given that on February
Securities and Exchange Commission,
16, 2006, the New York Stock Exchange
100 F Street, NE., Washington, DC
LLC (‘‘NYSE’’ or ‘‘Exchange’’) filed with
20549–1090.
the Securities and Exchange
Commission (‘‘Commission’’) the
All submissions should refer to File
proposed rule change as described in
Number SR–NYSE–2006–24. This file
Items I, II, and III below, which Items
number should be included on the
subject line if e-mail is used. To help the have been prepared by the NYSE. On
April 27, 2006, NYSE filed Amendment
Commission process and review your
No. 1 to the proposed rule change.3 The
comments more efficiently, please use
only one method. The Commission will Commission is publishing this notice to
post all comments on the Commission’s solicit comments on the proposed rule
change, as amended, from interested
Internet Web site (https://www.sec.gov/
persons.
rules/sro.shtml). Copies of the
submission, all subsequent
I. Self-Regulatory Organization’s
amendments, all written statements
Statement of the Terms of Substance of
with respect to the proposed rule
the Proposed Rule Change
change that are filed with the
The Exchange is proposing to amend
Commission, and all written
NYSE Rule 104 (Dealings by Specialists)
communications relating to the
to permit specialists to effect
proposed rule change between the
Commission and any person, other than destabilizing dealer account
transactions when matching the
those that may be withheld from the
public in accordance with the
8 17 CFR 200.30–3(a)(12).
provisions of 5 U.S.C. 552, will be
1 15 U.S.C. 78s(b)(1).
available for inspection and copying in
2 17 CFR 240.19b–4.
the Commission’s Public Reference
3 In Amendment No. 1, the Exchange made
Room. Copies of such filing also will be technical corrections to the rule text of the
proposed rule change.
available for inspection and copying at
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Paper Comments
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16:06 May 15, 2006
Jkt 208001
28399
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Frm 00104
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Dealings by Specialists
E:\FR\FM\16MYN1.SGM
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]]>Agencies
[Federal Register Volume 71, Number 94 (Tuesday, May 16, 2006)]
[Notices]
[Pages 28398-28399]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-7392]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53780; File No. SR-NYSE-2006-24]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Rule Change Relating to Exchange Rule
104(d) Governing Specialist Trading in the NYSE Hybrid Market
May 10, 2006.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on April 7, 2006, the New York Stock Exchange LLC (``NYSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I, II,
and III below, which Items have been prepared by the 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\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Exchange Rule 104(d) governing
specialist trading in the NYSE HYBRID MARKET SM (``Hybrid
Market'').\3\ Specifically, the Exchange proposes to amend Exchange
Rule 104(d) to provide that specialists shall have the ability to
maintain undisplayed reserve interest on behalf of the dealer account
at the Exchange best bid and offer, provided at least 1,000 shares of
dealer interest is displayed at that price, on the same side of the
market as the reserve interest. The text of the proposed rule change is
available on the Exchange's Web site (https://www.nyse.com), at the
Exchange's Office of Secretary, and at the Commission's Public
Reference Room.
---------------------------------------------------------------------------
\3\ On March 22, 2006, the Commission approved the Exchange's
proposal to establish a ``Hybrid Market.'' See Securities Exchange
Act Release No. 53539, 71 FR 16353 (March 31, 2006) (``Hybrid Market
Approval Order''). In the Hybrid Market Approval Order, the
Commission approved the Exchange's plan to implement the Hybrid
Market in multiple phases. To date, the Exchange has not implemented
the approved changes to Exchange Rule 104(d). The Commission notes
that in this proposal, the Exchange proposes to amend the text of
Rule 104(d) as approved in the Hybrid Market Approval Order.
Further, the Commission notes that the Exchange's description of
Rule 104(d) herein refers to the approved text of Rule 104(d).
---------------------------------------------------------------------------
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. 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
The Exchange notes that the Hybrid Market was approved by the
Commission on March 22, 2006.\4\ In the Hybrid Market, Exchange Rule
104(d) provides that specialists may, but are not required to, have
non-displayed ``reserve'' interest at the best bid and offer. Reserve
interest is interest at the best bid or offer that is not displayed.
Reserve interest will participate in automatic executions after
displayed interest on that side trades. Currently, the specialist must
have a minimum amount of 2,000 shares displayed at the best bid or
offer in order to have reserve interest on that side of the quote.
Floor brokers also are permitted to have reserve interest.\5\ However,
Floor brokers are only required to display 1,000 shares at the best bid
or offer in order to have reserve interest. Accordingly, the Exchange
proposes to conform the minimum display requirements for reserve
interest for specialists and Floor brokers. Therefore, the Exchange
proposes to amend Exchange Rule 104(d)(i) to provide that specialists
shall have the ability to maintain undisplayed reserve interest on
behalf of the dealer account at the Exchange best bid and offer,
provided at least 1,000 shares of dealer interest is displayed at that
price, on the same side of the market as the reserve interest.
---------------------------------------------------------------------------
\4\ See Securities Exchange Act Release No. 53539 (March 22,
2006), 71 FR 16353 (March 31, 2006) (SR-NYSE-2004-05).
\5\ See Exchange Rule 70.20(c)(ii).
---------------------------------------------------------------------------
In addition, the Exchange proposes to amend Exchange Rule
104(d)(ii) to conform it to the 1,000 share minimum display
requirement. Thus, this rule will require that after an execution, if
specialist interest remains at the best bid or offer, the amount of
such displayed interest will be replenished by the specialist's reserve
interest, if any, so that at least a minimum of 1,000 shares (instead
of the current 2,000 shares) of specialist interest is displayed or
whatever specialist interest remains at the best bid or offer, if less
than 1,000 shares (instead of the current 2,000 shares).
The Exchange believes that it is best to have a uniform standard
for the minimum amount of interest required to be displayed at the best
bid or offer in order to have reserve interest as it will deter market
participants from trying to deduce if a certain amount of liquidity on
the Display Book[supreg] is associated with a Floor broker versus a
specialist.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b)(5) of the Act \6\ 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 believes that the proposed rule change also is designed to
support the principles of section 11A(a)(1) of the Act \7\ in that it
seeks to assure economically efficient execution of securities
transactions, make it practicable for brokers to execute investors'
orders in the best market, and provide an opportunity for investors'
orders to be executed without the participation of a dealer.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b)(5).
\7\ 15 U.S.C. 78k-1(a)(1).
---------------------------------------------------------------------------
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.
[[Page 28399]]
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 self-regulatory organization consents, the Commission will:
(A) By order approve such proposed rule change, or
(B) Institute proceedings to determine whether the proposed rule
change should be disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change 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-2006-24 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2006-24. 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-2006-24 and should be submitted on or before June
6, 2006.
---------------------------------------------------------------------------
\8\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\8\
Nancy M. Morris,
Secretary.
[FR Doc. E6-7392 Filed 5-15-06; 8:45 am]
BILLING CODE 8010-01-P
