[Federal Register Volume 62, Number 235 (Monday, December 8, 1997)]
[Notices]
[Pages 64613-64614]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32027]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39368; File No. SR-NYSE-97-32]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. Relating to Extension of the Pilot for Allocation Policy and 
Procedures

November 26, 1997.
    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 November 26, 1997, 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 self-
regulatory organization. The Commission is publishing this notice 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.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change extends the effectiveness of the pilot 
program relating to the Exchange's Allocation Policy and Procedures 
until January 16, 1998. The text of the proposed rule change is 
available at the Office of the Secretary, the NYSE, and at the 
Commission.

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 self-regulatory organization 
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 self-regulatory organization 
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 purpose of the proposed rule change is to extend the 
effectiveness of a pilot program relating to the Exchange's Allocation 
Policy and Procedures. The Exchange's Allocation Policy and Procedures 
are intended: (1) To ensure that securities are allocated in an 
equitable and fair manner and that all specialist units have a fair 
opportunity for allocations based on established criteria and 
procedures; (2) to provide an incentive for ongoing enhancement of 
performance by specialist units; (3) to provide the best possible match 
between specialist unit and security; and (4) to contribute to the 
strength of the specialist system.

[[Page 64614]]

    The Exchange recently implemented, on a pilot basis, a revised 
Allocation Policy and Procedures to amend the procedures by which the 
Exchange selects a specialist for newly listing companies.\3\ The 
Exchange's pilot program provides listing companies with two options, 
either: (1) to have their specialist unit selected by the Allocation 
Committee according to existing allocation criteria, with company input 
permitted in the form of a ``generic letter'' which may describe 
desired general characteristics of a specialist unit, but may not 
mention particular units or describe characteristics that would be 
applicable to a readily identifiable specialist unit; or (2) to make 
the final selection of a specialist unit from among three to five units 
selected by the Allocation Committee, with a generic letter from the 
company describing desired specialist unit characteristics permitted, 
as in (1) above. In the case of both options, if a generic letter is 
submitted, the letter would be distributed to all specialist units 
along with allocation data sheets (``green sheets'').
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    \3\ See Securities Exchange Act Release No. 38372 (March 7, 
1997), 62 FR 13421 (March 21, 1997) (notice of filing and immediate 
effectiveness of File No. SR-NYSE-97-04).
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    On October 6, 1997, the Commission approved an extension of the 
pilot program until November 28, 1997 to continue to study its 
effects.\4\ On October 20, 1997, the NYSE requested that the Commission 
grant permanent approval of the Allocation Policy and Procedures, as 
amended.\5\ The proposed amendments relate to sections of the policy 
dealing with listing company input, spin-offs and related companies. 
Subsequently, Commission staff determined that the Commission required 
more time to consider the Exchange's request to make permanent the 
amendments to the Allocation Policy and Procedures. Therefore, at the 
request of Commission staff, the Exchange proposes to extend the 
Allocation Policy and Procedures pilot program until January 16, 1998.
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    \4\ See Securities Exchange Act Release No. 39206, 62 FR 53679 
(October 15, 1997) (order approving File No. SR-NYSE-97-27).
    \5\ See Securities Exchange Act Release No. 39288 (October 30, 
1997), 62 FR 60297 (November 7, 1997) (noticing File No. SR-NYSE-97-
30).
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2. Statutory Basis
    The NYSE believes the proposed rule change is consistent with the 
requirements of Section 6(b)(5) of the Act \6\ that an Exchange have 
rules that are designed to promote just and equitable principles of 
trade, to remove impediments and to 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 extending 
the effectiveness of the Allocation Policy and Procedures until January 
16, 1998 is consistent with these objectives in that they enable the 
Exchange to further enhance the process by which stocks are allocated 
between specialist units to ensure fairness and equal opportunity in 
the process.
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    \6\ 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.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The Commission finds that the proposed rule change has become 
effective pursuant to Section 19(b)(3)(A) of the Act \7\ and Rule 19b-
4(e)(6) \8\ thereunder because it does not significantly affect the 
protection of investors or the public interest and does not impose any 
significant burden on competition. The Exchange requests that the 
Commission waive the provision in Rule 19b-4(e)(6)(iii) \9\ requiring 
written notice of the NYSE's intent to file the proposed rule change at 
least five days prior to the filing date. The Commission grants the 
Exchange's request to waive the prefiling requirement because the 
proposed merely continues an existing pilot program for a limited 
duration.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 240.19b-4(e)(6).
    \9\ 17 CFR 240.19b-4(e)(6)(iii).
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    A proposed rule change filed under Rule 19b-4(e) does not become 
operative prior to thirty days after the date of filing or such shorter 
time as the Commission may designate if such action is consistent with 
the protection of investors and the public interest. 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 Commission finds good cause for the proposed rule change to 
become operative prior to the thirtieth day after the date of the 
filing, November 26, 1997. The Commission notes that accelerating the 
operative date of the proposed rule change will enable the Exchange to 
continue its Allocation Policy and Procedures pilot program on an 
uninterrupted basis. The Commission further notes that it has 
previously solicited comments on the pilot program and no comments were 
received. Further, the extension of the existing pilot is of limited 
duration, only until January 16, 1998. For the foregoing reasons, the 
proposed rule change will become operative on November 28, 1997.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW., Washington, D.C. 20549. 
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, 450 Fifth Street, NW, Washington, 
D.C. 20549. Copies of such filing will also be available for inspection 
and copying at the principal office of the NYSE. All submissions should 
refer to File No. SR-NYSE-97-32 and should be submitted by December 29, 
1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-32027 Filed 12-5-97; 8:45 am]
BILLING CODE 8010-01-M