Federal Register / Vol. 65, No. 95 / Tuesday, May 16, 2000 / Notices 31199

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 29237

(May 24, 1991), 56 FR 24853 (May 31, 1991) (Files

No. SR–NYSE–90–52 and SR–NYSE–90–53).

4See id.

and compensation information not yet

reported to the RRB through the annual

reporting process. The reporting

requirements are specified in 20 CFR

209.4 and 209.5.

The RRB currently utilizes Form G–

88A, Employer’s Supplemental Report

of Service and Compensation and Form

AA–12, Notice of Death and Statement

of Compensation, to obtain the required

lag service and compensation and

related information from railroad

employers.

The RRB proposes to obsolete Form

G–88a. Form G–88a will be replaced by

two forms, Form G–88a.1, Notice of

Retirement and Request for Verification

of Date Last Worked, and G–88a.2,

Notice of Retirement and Request for

Service Needed for Eligibility. Form G–

88a.1 will be sent by the RRB to railroad

employers and used for the specific

purpose of verifying information

previously provided to the RRB

regarding the date last worked by the

employee. If the information is correct,

the employer need not reply. If the

information is incorrect, the employer is

asked to provide corrected information.

Form G–88a.2 will be used by the RRB

to secure lag service and compensation

information when it is needed to

determine benefit eligibility. Both

proposed forms will direct the railroad

employers to fax the information

directly to the RRB. It is expected that

the proposed new forms will be easier

for railroad employers to complete and

encourage a speedier reply, allowing the

RRB to pay applicants in a more timely

and accurate manner. A minor editorial

change is proposed to Form AA–12.

The completion time for proposed

forms G–88a.1 and G–88a.2 is estimated

at 5 minutes per response. The

estimated completion time for Form

AA–12 is estimated at 61⁄2 minutes per

response. The RRB estimates that

approximately 800 Form AA–12’s, 2,300

Form G–88a.1’s and 1,200 G–88.2’s will

be completed annually.

ADDITIONAL INFORMATION OR COMMENTS:

To request more information or to

obtain a copy of the information

collection justification, forms, and/or

supporting material, please call the RRB

Clearance Officer at (312) 751–3363.

Comments regarding the information

collection should be addressed to

Ronald J. Hodapp, Railroad Retirement

Board, 844 North Rush Street, Chicago,

Illinois 60611–2092. Written comments

should be received within 60 days of

this notice.

Chuck Mierzwa,

Clearance Officer.

[FR Doc. 00–12199 Filed 5–15–00; 8:45 am]

BILLING CODE 7905–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42770; File No. SR–NYSE–

99–31]

Self-Regulatory Organizations; New

York Stock Exchange, Inc.; Order

Granting Approval to Proposed Rule

Change Amending Exchange Rules

902, 903 and 906

May 10, 2000.

I. Introduction

On June 30, 1999, the New York Stock

Exchange, Inc. (‘‘NYSE’’ or ‘‘Exchange’’)

submitted to the Securities and

Exchange Commission (‘‘SEC’’ or

‘‘Commission’’), pursuant to Section

19(b)(1) of the Securities Exchange Act

of 1934 (‘‘Act’’)1 and Rule 19b–4

thereunder,2 a proposed rule change to

amend Exchange Rules 902, 903 and

906.

The proposed rule change was

published for comment in the Federal

Register on September 1, 1999. No

comments were received on the

proposal. This order approves the

proposal.

II. Description of the Proposal

The Exchange proposes to amend

NYSE Rules 902, 903 and 906 to permit

coupled orders to be submitted after the

official closing of the 9:30 a.m. to 4:00

p.m. trading session until 5:00 p.m. (the

period after the 4:00 p.m. close until

5:00 p.m. hereafter referred to as

‘‘Crossing Session 1’’) where both sides

represent member or member

organization interest, in circumstances

in which a specialist has included

another member’s or member

organization’s interest in offsetting the

imbalance when setting a closing price.

In 1991, the Exchange established its

‘‘Off-Hours Trading Facility.’’ 3 In

connection with its implementation, the

Exchange adopted its ‘‘900’’ series of

rules to govern trading, order eligibility,

order entry and record keeping

requirements.4

At 4:00 p.m. each day, the Exchange

completes its normal procedure for the

close of trading of the 9:30 a.m.–4:00

p.m. trading session. After 4:00 p.m., a

common message switch broadcast

message is published announcing the

commencement of Crossing Session 1,

which runs until 5:00 p.m.

During Crossing Session 1, the OffHours Trading Facility permits members

and member organizations to enter

orders to be executed at the NYSE

closing price, that is, the price

established by the last regular way sale

in a security at the official closing of the

9:30 a.m. to 4:00 p.m. trading session.

Orders may be entered for any Exchange

listed issue, other than a security that is

subject to a trading halt at the close of

the regular trading session (including a

Rule 80B trading halt) or is halted after

4:00 p.m.

The Exchange proposes to modify

certain rules pertaining to Crossing

Session 1 in an effort to reduce volatility

and price dislocations at the 4:00 p.m.

close by enabling the specialist to reflect

legitimate market interest that was

willing to participate in the close, but

could not enter a timely order.

In circumstances in which a stock has

an imbalance of market-on-close or

limit-on-close orders, or when the

closing price will elect a significant

volume of stop orders, there may be

little time to attract offsetting orders. A

member, member organization or a

customer may be willing to offset the

imbalance, but be unable to enter an

order before 4:00 p.m. The specialist

may then have to acquire a substantial

position or halt trading.

Under NYSE Rule 902, coupled orders

to buy and sell the same amount of the

same security may be entered into

Crossing Session 1. However, such

coupled orders may not be entered if

they are both for an account of a

member or member organization, or for

an account in which an ‘‘associated

person’’ of a member or member

organization has an interest.

Therefore, while a specialist member

organization may enter an order coupled

with a contra-side order from a nonmember in Crossing Session 1, it may

not enter an order coupled with an

order for a member’s or member

organization’s account.

The Exchange proposes to amend

NYSE Rule 902 to permit coupled

orders to be submitted to Crossing

Session 1 where both sides represent

member or member organization

interest, in circumstances in which a

specialist has included another

member’s or member organization’s

interest in offsetting the imbalance

when setting a closing price. Thus, the

specialist may increase his or her

participation at the close in anticipation

of trading with a member or member

organization in Crossing Session 1 and

the closing price should reflect less of

an imbalance.

Under NYSE Rule 903, orders entered

in Crossing Session 1, including

coupled orders, are executed at the 5:00

p.m. close of the session. Under NYSE

31200 Federal Register / Vol. 65, No. 95 / Tuesday, May 16, 2000 / Notices

5 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f). 6 15 U.S.C. 78f(b)(5).

7 Id.

8 Id.

9The Commission, in granting approval, notes

that Floor Officials should carefully review

specialist requests to enter these types of trades into

Crossing Session 1. In particular, Floor Officials

should consider the frequency with which

particular specialists request to use this rule, and

whether there have been any instances or prior

problems associated with a particular specialist’s

use of this rule. For example, Floor Officials should

consider whether there have been occasions in

which there were significant discrepancies between

the execution price contemplated by a member firm

and the price actually received as a result of the

Crossing Session 1 transaction.

10 15 U.S.C. 78s(b)(2).

11 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

Rule 906, if the Exchange determines

that material news is disclosed between

4:00 p.m. and 5:00 p.m., such as news

about a corporate development, the

Exchange will cancel orders received in

Crossing Session 1 and will preclude

the entry of any subsequent orders.

However, in the circumstances outlined

above, it is the Exchange’s view that a

good faith negotiation tied to

establishing the closing price should not

be affected by a subsequent event which

‘‘halts’’ trading.

Therefore, the Exchange proposes to

amend NYSE Rules 903 and 906 to

permit trades for the account of a

specialist and a member, member

organization or a non-member to be

executed immediately when entered

into Crossing Session 1, not at 5:00 p.m.,

regardless of whether the Exchange has

determined that all other Crossing

Session 1 orders be canceled and

precluded from entry. In addition, the

Exchange proposes to require a

specialist to obtain Floor Official

approval for the entry of his or her order

into Crossing Session 1 if such order is

not to be at the risk of the market, i.e.,

it will be executed immediately and will

not be precluded from entry because of

a trading ‘‘halt.’’ The Exchange believes

this requirement will help to insure that

orders which are intended to offset the

specialist’s participation at the close

have been reflected when the closing

price was established. Other coupled

orders would continue to be executed at

5:00 p.m., subject to the stock not being

withdrawn from Crossing Session 1. The

Exchange believes that retaining this

provision for other coupled orders is

appropriate for the protection of

investors who may not be aware of the

corporate development.

Under the proposal, total executed

volume for coupled orders which are

executed either immediately upon entry

or at 5:00 p.m. will be reported to the

tape as a single print, and will continue

to be reported as ‘‘sold.’’

Discussion

After careful review, the Commission

finds that the proposed rule change is

consistent with the requirements of the

Act and the rules and regulations

thereunder applicable to a national

securities exchange.5 In particular, the

Commission finds the proposal is

consistent with Section 6(b)(5) of the

Act,6 which requires that an Exchange

promulgate 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, in general, to protect

investors and the public interest.

The Exchange’s proposed amendment

to NYSE Rule 902 should allow a

specialist to increase his or her

participation at the close in anticipation

of trading with a member or member

organization in Crossing Session 1,

thereby resulting in a more orderly close

during periods of extraordinary

volatility.

The Exchange also proposes to amend

NYSE Rules 903 and 906 to permit

trades for the account of a specialist and

a member, member organization or a

non-member to be executed

immediately when entered into Crossing

Session 1, rather than at 5:00 p.m. The

amendment will allow such trades to be

executed immediately when entered

into Crossing Session 1, regardless of

whether the Exchange has determined

that all other Crossing Session 1 orders

in a particular security be canceled and

precluded from entry. The proposal also

will require a specialist to obtain Floor

Official approval for the entry of his or

her order into Crossing Session 1 if such

order is not to be executed immediately

and will not be precluded from entry

because of a trading ‘‘halt.’’ The

Exchange has represented that this

amendment is based on the premise that

a specialist involved in a good faith

renegotiation tied to establishing the

closing price should not have his or her

trades remain unexecuted if a

subsequent event ‘‘halts’’ trading in the

security.

The Commission finds that the

Exchange’s proposed amendments to

NYSE Rules 903 and 906 should help to

insure that orders which are intended to

offset a specialist’s participation at the

close have been reflected when the

closing price was established, resulting

in a more orderly close. Such provisions

are consistent with Section 6(b)(5),7

which requires the rules of an Exchange

be designed 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 Commission further finds that

retaining the provision requiring other

coupled orders to continue to be

executed at 5:00 p.m., subject to the

stock not being withdrawn from

Crossing Session 1, as appropriate under

Section 6(b)(5) of the Act,8 which

requires an Exchange’s rules be

designed to protect investors and the

public interest. An investor, after having

entered an order into Crossing Session

1, may be unaware of a corporate

development which could have

substantial impact on the price of a

security.Retaining the provision which

requires other coupled orders to be

executed at the close of Crossing

Session 1 will help to ensure that

investors who are unaware of corporate

news will be adequately protected,

should the corporate news have an

unfavorable impact on the price of the

stock.9

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,10 that the

proposed rule change (SR–NYSE–99–

31) is approved.

For the Commission, by the Division of

Market Regulations, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–12271 Filed 5–15–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42767; File No. SR–PCX–

99–07]

Self-Regulatory Organizations; Order

Approving Proposed Rule Change and

Notice of Filing and Order Granting

Accelerated Approval to Amendment

No. 2 to the Proposed Rule Change by

the Pacific Exchange, Inc. Relating to

Its Competing Specialist Program

I. Introduction

On March 1, 1999, the Pacific

Exchange, Inc. (‘‘PCX’’ or ‘‘Exchange’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’ or ‘‘SEC’’),

pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2 a

proposed rule change to implement a

competing specialist program. The