[Federal Register Volume 66, Number 78 (Monday, April 23, 2001)]
[Notices]
[Pages 20510-20511]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-9964]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-44179; File No. SR-NYSE-2001-05]
Self-Regulatory Organizations; Notice of Filing of Proposed Rule
Change and Amendment No. 1 to the Proposed Rule Change by the New York
Stock Exchange, Inc., Relating to the Expansion of the Maximum Share
Size Parameter for Single Orders Entered Into the SuperDot System
April 13, 2001.
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 March 2, 2001, 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. On March 30, 2001, the Exchange amended its proposal
(``Amendment No. 1'') to provide a revised Exhibit 1 to the
proposal.\3\ The Commission is publishing this notice, as amended, to
solicit comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ The revised Exhibit 1 indicates that the proposal is
pursuant to Section 19(b)(2) of the Act rather than section
19(b)(3)(A) of the Act, as was indicated in the original Exhibit 1.
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I. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
The proposed rule change consists of a further expansion of the
maximum share size parameter for single orders entered into the
SuperDot System (``SuperDot System'' or ``SuperDot'') originally
proposed by the Exchange.\4\
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\4\ In January 2001, a NYSE proposal to increase the maximum
SuperDot share size parameter to 1,000,000 shares became effective.
See Securities Exchange Act Release No. 43880 (January 23, 2001), 65
FR 8828 (February 2, 2001) (SR-NYSE-00-63) (``January Proposal'').
In the January Proposal, the NYSE proposed to increase the maximum
SuperDot share size parameter in two stages, with an initial
increase to 500,000 shares, followed in six months by an increase to
1,000,000 shares.
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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 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 and is set forth in Sections A, B, and C below.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange's SuperDot System provides automated order routing and
reporting services to facilitate the timely and effective transmission,
execution, and reporting of market and limit orders on the Exchange.
Pursuant to paragraph (a) of NYSE Rule 123B, ``Exchange Automated Order
Routing Systems,'' members and member organizations may utilize the
SuperDot System to transmit orders of such size as the Exchange may
specify from time to time.
In the January Proposal, the Exchange amended the maximum share
size parameters for single market and limit orders entered into the
SuperDot System from 30,099 shares (for single market orders) and
99,999 shares (for single limit orders) to 500,000 shares initially, to
be followed by an increase six months later to 1,000,000 shares.\5\
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\5\ See January Proposal, supra note 4.
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The purpose of this filing is to further amend the maximum share
size parameter for single market and limit orders entered into the
SuperDot System. The Exchange proposes to increase the maximum order
size for both market and limit orders to 3,000,000 shares. The increase
would become effective six months after the increase to 1,000,000
shares.
The Exchange believes that the proposed increase would provide many
benefits to those that use the SuperDot System. The proposed amendment
would facilitate openings and closings by increasing the number of
shares that can be accommodated, especially in initial public offering
situations. The proposed amendment would also eliminate the need for
firms and institutions to break up large orders in order to make them
SuperDot eligible, streamline the cancel and replace process, and
reduce some of the paper from the floor, in support of the Exchange's
goal of having a ``paperless'' floor. Further, the Exchange believes
that the proposed increase would be compatible with the maximum share
size capabilities of the Broker Booth Support System.\6\ Moreover, this
proposed rule change would help facilitate the electronic capture of
orders required by NYSE Rule 123, ``Record of Orders.'' \7\
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\6\ The Broker Booth Support System is an order management
system designed exclusively for NYSE members. The maximum share size
capability for the Broker Booth Support System is 3,000,000 shares.
Telephone conversation between John Lomnicky, Senior Project
Specialist, Market Surveillance, NYSE, and Lisa Jones, Attorney,
Division of Market Regulation, Commission (April 12, 2001).
\7\ See Securities Exchange Act Release No. 43689 (December 7,
2000), 65 FR 79145 (December 18, 2000) (order approving File No. SR-
NYSE-99-25).
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2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under section 6(b)(5) of the Act \8\ that an Exchange have
rules that are designed to promote just and equitable principles of
trade, to remove impediments to and perfect the mechanism of a free and
open market and a national market system and, in general, to protect
investors and the public interest.
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\8\ 15 U.S.C. 78f(b)(5).
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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, not necessary or appropriate in furtherance
of the purposes of the Act.
III. Date of Effectiveness of the Proposed Rule Change and Timing
for Commission Action
Within 35 days of the publication of this notice in the Federal
Register or
[[Page 20511]]
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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.
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 will also be
available for inspection and copying at the principal office of the
Exchange.
All submissions should refer to File No. SR-NYSE-2001-05 and should
be submitted by May 14, 2001.
For the Commission, by the Division of Market Regulation,
pursuant to the delegated authority.\9\
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\9\ 17 CFR 200.30-2(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 01-9964 Filed 4-20-01; 8:45 am]
BILLING CODE 8010-01-M