Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Relating to Amending Rule 123D (Openings and Halts in Trading) To Shorten the Minimum Required Time Periods Between Tape Indications and Openings and Between Halts or “Equipment Changeovers” and Reopenings, 50963-50964 [E6-14198]

Download as PDF Federal Register / Vol. 71, No. 166 / Monday, August 28, 2006 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–54337; File No. SR–NYSE– 2006–49] Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Rule Change and Amendment No. 1 Relating to Amending Rule 123D (Openings and Halts in Trading) To Shorten the Minimum Required Time Periods Between Tape Indications and Openings and Between Halts or ‘‘Equipment Changeovers’’ and Reopenings A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose August 21, 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 June 30, 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 NYSE. On August 14, 2006, the Exchange submitted Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange is proposing to amend NYSE Rules 123D and 15 to shorten the minimum time periods between tape indications and openings or reopenings of a security and after an ‘‘Equipment Changeover.’’ 4 The text of the proposed rule change, as amended, is available on the NYSE’s Web site at https:// www.nyse.com, the principal office of the NYSE, and at the Commission’s Public Reference Room. mstockstill on PROD1PC61 with NOTICES 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 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 In Amendment No. 1, NYSE made minor revisions to the proposed rule text and clarified that all market participants may react to published price indications. 4 See Exchange Rule 123D(2). 2 17 VerDate Aug<31>2005 15:09 Aug 25, 2006 Jkt 208001 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. Exchange specialists are responsible for ensuring that their specialty securities open for trading as close to the opening bell as possible, and reopen for trading after a trading halt as soon as possible, consistent with the relevant circumstances. In addition to being timely, however, openings and reopenings after a trading halt should also be fair and orderly, reflecting a professional assessment of market conditions at the time and appropriate consideration of the balance of supply and demand as reflected by orders represented in the market. Ordinarily, the specialist provides this information to the market before the opening bell in the form of price indications that are published on the consolidated tape. However, under certain circumstances, including a delayed opening of a security and the reopening of trading in a security after a trading halt, the specialist may be required to publish a price indication to the market that reflects the specialist’s assessment of market conditions at the time of the delayed opening or reopening to provide market participants with the opportunity to react and participate as they deem appropriate. Over the years, in developing procedures for openings and reopenings of trading, the Exchange has focused on providing a balance between timeliness and appropriateness of price, i.e., achieving a price that reflects market conditions at the time, and giving investors a reasonable opportunity to react and participate. The Exchange’s current rules require minimum time periods as long as ten minutes between a specialist’s dissemination of a price indication and the delayed opening or reopening of trading.5 Recognizing that the speed of communication has increased exponentially in the last decade and that market conditions may change substantially between the indication and the opening or resumption of trading under the time frames included in the current rule, the Exchange believes it is desirable to shorten the 5 See PO 00000 Exchange Rule 123D. Frm 00082 Fmt 4703 Sfmt 4703 50963 time between indications and the opening or reopening of trading in a security. The Exchange believes shortening the time periods would provide the market with the flexibility to react quickly if circumstances are such that it would be appropriate to open or reopen trading in a short period of time. Accordingly, the Exchange is proposing to revise the minimum time required for delayed openings of trading and reopenings of trading after a trading halt. In connection with a delayed opening of trading in a security, Exchange Rule 123D (Openings and Halts in Trading) currently requires a minimum of ten minutes to elapse between the first price indication and the opening of the stock, and where there is more than one indication, a minimum of five minutes to elapse after the last indication, provided in all cases that at least ten minutes have elapsed since the first indication. The Exchange proposes that these minimum time periods be compressed from ten to three minutes after the first indication, and to one minute after the last indication, provided that a minimum of three minutes have elapsed since the first indication. With respect to the reopening of trading after a stock has been halted during the trading day, Exchange Rule 123D currently requires a minimum of five minutes to elapse between the first indication and the reopening of trading, and a minimum of three minutes to elapse after the last indication, provided that at least five minutes has elapsed since the first indication. The Exchange proposes that these minimum time periods be compressed to three minutes after the first indication, and to one minute after the last indication, provided that a minimum of three minutes has elapsed since the first indication. With respect to the reopening of trading after a stock has been halted during the trading day because of ‘‘Equipment Changeover,’’ Exchange Rule 123D currently requires a minimum of five minutes to elapse before trading resumes. Further, if, during the ‘‘Equipment Changeover’’ trading halt, a significant order imbalance (i.e., one which would result in a price change from the last sale of one point or more for stocks under $10, the lesser of 10% or three points for stocks between $10–$99.99 and five points for stocks $100 or more—unless a Floor Governor deems circumstances warrant a lower parameter) develops or a regulatory condition occurs, the nature of the halt will be changed and notice must be disseminated and trading E:\FR\FM\28AUN1.SGM 28AUN1 50964 Federal Register / Vol. 71, No. 166 / Monday, August 28, 2006 / Notices cannot resume until ten minutes after the first indication of the new halt condition. The Exchange proposes that these minimum time periods be compressed to one minute after an ‘‘Equipment Changeover’’ and to three minutes after an ‘‘Equipment Changeover’’ during which a significant order imbalance or regulatory condition develops. The Exchange notes that there are different indication requirements for different classes of securities, such as foreign-listed securities and convertible preferred stock. The proposed amendments to Exchange Rule 123D do not alter those requirements. The Exchange also proposes that the same minimum time period changes be added to a related rule, Exchange Rule 15 (ITS and Pre-Opening Applications), in order to conform Exchange Rule 15 to the recently amended Intermarket Trading System Plan. Specifically, the Exchange proposes to amend Exchange Rule 15 to require that, when more than one indication is disseminated, a stock may reopen one minute after the last indication if three minutes have elapsed after the first indication. The Exchange also notes that the Consolidated Tape Association Plan has been amended to provide that following a trading halt, last sale information will be disseminated pursuant to a listing market’s rules and Exchange Rule 123D for Exchange-listed securities. 2. Statutory Basis The Exchange believes that its proposal is consistent with Section 6(b) of the Act 6 in general, and furthers the objectives of Section 6(b)(5) of the Act 7 in particular, 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. B. Self-Regulatory Organization’s Statement on Burden on Competition mstockstill on PROD1PC61 with NOTICES The Exchange does not believe that the proposed rule change would 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 Written comments were neither solicited nor received. 6 15 7 15 U.S.C. 78f(b). U.S.C. 78f(b)(5). VerDate Aug<31>2005 15:09 Aug 25, 2006 Jkt 208001 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 NYSE consents, the Commission will: A. By order approve such proposed rule change, as amended; or B. Institute proceedings to determine whether the proposed rule change, as amended, should be disapproved. 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 publicly available. All submissions should refer to File Number SR–NYSE–2006–49 and should be submitted on or before September 18, 2006. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.8 Nancy M. Morris, Secretary. [FR Doc. E6–14198 Filed 8–25–06; 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 is consistent with the Act. Comments may be submitted by any of the following methods: DEPARTMENT OF STATE [Public Notice 5524] Culturally Significant Objects Imported for Exhibition Determinations: ‘‘The Art of Jan van der Heyden’’ SUMMARY: Notice is hereby given of the following determinations: Pursuant to • Use the Commission’s Internet the authority vested in me by the Act of comment form (https://www.sec.gov/ October 19, 1965 (79 Stat. 985; 22 U.S.C. rules/sro.shtml); or 2459), Executive Order 12047 of March • Send an e-mail to rule27, 1978, the Foreign Affairs Reform and comments@sec.gov. Please include File Restructuring Act of 1998 (112 Stat. Number SR–NYSE–2006–49 on the 2681, et seq.; 22 U.S.C. 6501 note, et subject line. seq.), Delegation of Authority No. 234 of October 1, 1999, Delegation of Authority Paper Comments No. 236 of October 19, 1999, as • Send paper comments in triplicate amended, and Delegation of Authority to Nancy M. Morris, Secretary, No. 257 of April 15, 2003 [68 FR 19875], Securities and Exchange Commission, I hereby determine that the objects to be Station Place, 100 F Street, NE., included in the exhibition ‘‘The Art of Washington, DC 20549–1090. Jan van der Heyden,’’ imported from abroad for temporary exhibition within All submissions should refer to File the United States, are of cultural Number SR–NYSE–2006–49. This file significance. The objects are imported number should be included on the subject line if e-mail is used. To help the pursuant to loan agreements with the foreign owners or custodians. I also Commission process and review your determine that the exhibition or display comments more efficiently, please use only one method. The Commission will of the exhibit objects at the Bruce post all comments on the Commission’s Museum of Arts and Science, Greenwich, Connecticut, from on or Internet Web site (https://www.sec.gov/ about September 16, 2006, until on or rules/sro.shtml). Copies of the about January 10, 2007, and at possible submission, all subsequent additional venues yet to be determined, amendments, all written statements is in the national interest. Public Notice with respect to the proposed rule of these Determinations is ordered to be change that are filed with the published in the Federal Register. Commission, and all written communications relating to the FOR FURTHER INFORMATION CONTACT: For proposed rule change between the further information, including a list of Commission and any person, other than the exhibit objects, contact Richard those that may be withheld from the Lahne, Attorney-Adviser, Office of the public in accordance with the Legal Adviser, U.S. Department of State provisions of 5 U.S.C. 552, will be (telephone: 202/453–8058). The address available for inspection and copying in is U.S. Department of State, SA–44, 301 the Commission’s Public Reference 4th Street, SW. Room 700, Washington, Room. Copies of such filing also will be DC 20547–0001. available for inspection and copying at 8 17 CFR 200.30–3(a)(12). the principal office of the Exchange. All Electronic Comments PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 E:\FR\FM\28AUN1.SGM 28AUN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 71, Number 166 (Monday, August 28, 2006)]
[Notices]
[Pages 50963-50964]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-14198]



[[Page 50963]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54337; File No. SR-NYSE-2006-49]


 Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing of Proposed Rule Change and Amendment No. 1 Relating 
to Amending Rule 123D (Openings and Halts in Trading) To Shorten the 
Minimum Required Time Periods Between Tape Indications and Openings and 
Between Halts or ``Equipment Changeovers'' and Reopenings

August 21, 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 June 30, 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 NYSE. On August 
14, 2006, the Exchange submitted Amendment No. 1 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, NYSE made minor revisions to the 
proposed rule text and clarified that all market participants may 
react to published price indications.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is proposing to amend NYSE Rules 123D and 15 to 
shorten the minimum time periods between tape indications and openings 
or reopenings of a security and after an ``Equipment Changeover.'' \4\ 
The text of the proposed rule change, as amended, is available on the 
NYSE's Web site at https://www.nyse.com, the principal office of the 
NYSE, and at the Commission's Public Reference Room.
---------------------------------------------------------------------------

    \4\ See Exchange Rule 123D(2).
---------------------------------------------------------------------------

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 specialists are responsible for ensuring that their 
specialty securities open for trading as close to the opening bell as 
possible, and reopen for trading after a trading halt as soon as 
possible, consistent with the relevant circumstances. In addition to 
being timely, however, openings and reopenings after a trading halt 
should also be fair and orderly, reflecting a professional assessment 
of market conditions at the time and appropriate consideration of the 
balance of supply and demand as reflected by orders represented in the 
market.
    Ordinarily, the specialist provides this information to the market 
before the opening bell in the form of price indications that are 
published on the consolidated tape. However, under certain 
circumstances, including a delayed opening of a security and the 
reopening of trading in a security after a trading halt, the specialist 
may be required to publish a price indication to the market that 
reflects the specialist's assessment of market conditions at the time 
of the delayed opening or reopening to provide market participants with 
the opportunity to react and participate as they deem appropriate.
    Over the years, in developing procedures for openings and 
reopenings of trading, the Exchange has focused on providing a balance 
between timeliness and appropriateness of price, i.e., achieving a 
price that reflects market conditions at the time, and giving investors 
a reasonable opportunity to react and participate. The Exchange's 
current rules require minimum time periods as long as ten minutes 
between a specialist's dissemination of a price indication and the 
delayed opening or reopening of trading.\5\
---------------------------------------------------------------------------

    \5\ See Exchange Rule 123D.
---------------------------------------------------------------------------

    Recognizing that the speed of communication has increased 
exponentially in the last decade and that market conditions may change 
substantially between the indication and the opening or resumption of 
trading under the time frames included in the current rule, the 
Exchange believes it is desirable to shorten the time between 
indications and the opening or reopening of trading in a security. The 
Exchange believes shortening the time periods would provide the market 
with the flexibility to react quickly if circumstances are such that it 
would be appropriate to open or reopen trading in a short period of 
time. Accordingly, the Exchange is proposing to revise the minimum time 
required for delayed openings of trading and reopenings of trading 
after a trading halt.
    In connection with a delayed opening of trading in a security, 
Exchange Rule 123D (Openings and Halts in Trading) currently requires a 
minimum of ten minutes to elapse between the first price indication and 
the opening of the stock, and where there is more than one indication, 
a minimum of five minutes to elapse after the last indication, provided 
in all cases that at least ten minutes have elapsed since the first 
indication. The Exchange proposes that these minimum time periods be 
compressed from ten to three minutes after the first indication, and to 
one minute after the last indication, provided that a minimum of three 
minutes have elapsed since the first indication.
    With respect to the reopening of trading after a stock has been 
halted during the trading day, Exchange Rule 123D currently requires a 
minimum of five minutes to elapse between the first indication and the 
reopening of trading, and a minimum of three minutes to elapse after 
the last indication, provided that at least five minutes has elapsed 
since the first indication. The Exchange proposes that these minimum 
time periods be compressed to three minutes after the first indication, 
and to one minute after the last indication, provided that a minimum of 
three minutes has elapsed since the first indication.
    With respect to the reopening of trading after a stock has been 
halted during the trading day because of ``Equipment Changeover,'' 
Exchange Rule 123D currently requires a minimum of five minutes to 
elapse before trading resumes. Further, if, during the ``Equipment 
Changeover'' trading halt, a significant order imbalance (i.e., one 
which would result in a price change from the last sale of one point or 
more for stocks under $10, the lesser of 10% or three points for stocks 
between $10-$99.99 and five points for stocks $100 or more--unless a 
Floor Governor deems circumstances warrant a lower parameter) develops 
or a regulatory condition occurs, the nature of the halt will be 
changed and notice must be disseminated and trading

[[Page 50964]]

cannot resume until ten minutes after the first indication of the new 
halt condition. The Exchange proposes that these minimum time periods 
be compressed to one minute after an ``Equipment Changeover'' and to 
three minutes after an ``Equipment Changeover'' during which a 
significant order imbalance or regulatory condition develops.
    The Exchange notes that there are different indication requirements 
for different classes of securities, such as foreign-listed securities 
and convertible preferred stock. The proposed amendments to Exchange 
Rule 123D do not alter those requirements.
    The Exchange also proposes that the same minimum time period 
changes be added to a related rule, Exchange Rule 15 (ITS and Pre-
Opening Applications), in order to conform Exchange Rule 15 to the 
recently amended Intermarket Trading System Plan. Specifically, the 
Exchange proposes to amend Exchange Rule 15 to require that, when more 
than one indication is disseminated, a stock may reopen one minute 
after the last indication if three minutes have elapsed after the first 
indication.
    The Exchange also notes that the Consolidated Tape Association Plan 
has been amended to provide that following a trading halt, last sale 
information will be disseminated pursuant to a listing market's rules 
and Exchange Rule 123D for Exchange-listed securities.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act \6\ in general, and furthers the objectives of Section 
6(b)(5) of the Act \7\ in particular, 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change would 
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

    Written comments were neither solicited nor received.

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 NYSE consents, the Commission will:
    A. By order approve such proposed rule change, as amended; or
    B. Institute proceedings to determine whether the proposed rule 
change, as amended, 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-2006-49 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NYSE-2006-49. 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 publicly available. All submissions should refer to 
File Number SR-NYSE-2006-49 and should be submitted on or before 
September 18, 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. E6-14198 Filed 8-25-06; 8:45 am]
BILLING CODE 8010-01-P

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