Federal Register / Vol. 62, No. 33 / Wednesday, February 19, 1997 / Notices 7487

3 15 U.S.C. 78q–1.

4 15 U.S.C. 78s(b)(3)(A)(ii).

5 17 CFR 240.19b–4(e)(2).

6 17 CFR 200.30–3(a)(12).

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

2The Commission has modified the text of the

summaries prepared by DTC.

3 15 U.S.C. 78q–1.

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The purpose of the proposed rule

change is to revise the fees charged to

users who are not DTC participants for

automated reports listing the positions

of DTC participants in an issue. The

automated reports include the Weekly

Report Series, which shows the daily

closing balances during the week for

each participant having a security

credited to its DTC account; the

Monthly Report Series, which shows the

closing balance on the last business day

of the month for each participant having

a security credited to its DTC account;

the Dividend Record Date Series, a

quarterly report which shows the

closing balance for each participant

having a security credited to its DTC

account; on a dividend record date; and

the Special Request, which is available

for any business day and shows each

participant’s closing balance in the issue

on that day. DTC offers these reports to

third parties (e.g., trustees, issuers,

attorneys representing issuers, and other

attorneys when required by valid legal

process) who are not participants at

DTC. The revised fees for the automated

reports became effective on January 1,

1997.

DTC believes that the proposed rule

change is consistent with the

requirements of Section 17A(b)(3)(D) of

the Act3 and the

rules and regulations thereunder

because it provides for the equitable

allocation of reasonable dues, fees, and

other charges among users of DTC’s

services.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will impose any

burden on competition that is not

necessary or appropriate in the

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

No written comments on the proposed

rule change were solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A)(ii) 4 of the Act and pursuant

to Rule 19b–4(e)(2) 5 promulgated

thereunder in that the proposed rule

change establishes or changes a due, fee,

or other charge imposed by DTC. At any

time within sixty days of the filing of

such 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.

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, N.W.,

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

Section, 450 Fifth Street, N.W.,

Washington, D.C. 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to File No. SR–DTC–96–23 and

should be submitted by March 12, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4052 Filed 2–18–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38278; File No. SR–DTC–

96–25]

Self-Regulatory Organizations; The

Depository Trust Company; Notice of

Filing and Immediate Effectiveness of

Proposed Rule Change Relating to an

Amendment to DTC’s By-Laws

February 11, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

December 31, 1996, The Depository

Trust Company (‘‘DTC’’) 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 primarily by DTC. The

Commission is publishing this notice to

solicit comments from interested

persons on the proposed rule change.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change amends

DTC’s by-laws to authorize DTC’s Board

of Directors to modify its internal

management structure.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

DTC 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. DTC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of such statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The purpose of the proposed rule

change is to amend DTC’s by-laws to

authorize DTC’s Board of Directors to

modify its internal management

structure. In particular, DTC proposes to

amend Article III of its by-laws to

authorize DTC’s Board of Directors to

designate any one or more of DTC’s Vice

Presidents as Senior Vice President.

This is in addition to the Board of

Directors’ current authority to designate

any one or more of DTC’s Vice

Presidents as Executive Vice President

or Senior Executive Vice President and

to designate a Senior Executive Vice

President as DTC’s Chief Operating

Officer.

DTC believes that the proposed rule

change is consistent with the

requirements of Section 17A of the Act 3

and the rules and regulations

thereunder because it makes

administrative changes to DTC’s by-laws

so that they coincide with DTC’s new

internal management structure.
7488 Federal Register / Vol. 62, No. 33 / Wednesday, February 19, 1997 / Notices

4 15 U.S.C. 78s(b)(3)(A)(iii).

5 17 CFR 240.19b–4(e)(3).

6 17 CFR 200.30–3(a)(12). 1 15 U.S.C. 78s(b)(1).

2See NYSE Rule 124.60 (detailing the

circumstances when the ITS best bid or offer will

not be utilized).

3These uncodified guidelines currently provide

for the following valid spread ranges:

Common stock: for prices less than or equal to

$50, the valid spread is 1 point; for prices between

$50 1⁄64 and $100, the valid spread is 13⁄4 points;

for prices greater than $100, the valid spread is 21⁄2

points.

Preferred stock: for prices less than or equal to

$50, the valid spread is 2 points; for prices between

50 1⁄64 and 100, the valid spread is 21⁄4 points; for

prices greater than $100, the valid spread is 21⁄2

points.

Spread between quote and last sale must not

exceed: prices less than or equal to $10, the valid

spread is 3/8 point; prices between 101⁄8 and $25,

the valid spread is 1⁄2 point; prices between 251⁄8

and $40, the valid spread is 5⁄8 point; prices greater

than $40, the valid spread is 21⁄2 points.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

DTC does not believe that the

proposed rule change will have an

impact or impose a burden on

competition.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

No written comments on the proposed

rule change were solicited or received.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become

effective pursuant to Section

19(b)(3)(A)(iii) 4 of the Act and pursuant

to Rule 19b–4(e)(3) 5 promulgated

thereunder in that the proposed rule

change is concerned solely with the

administration of DTC. At any time

within sixty days of the filing of such

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.

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, DC 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

Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filing also will be available for

inspection and copying at the principal

office of DTC. All submissions should

refer to File No. SR–DTC–96–25 and

should be submitted by March 12, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–4053 Filed 2–18–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38267; File No. SR–NYSE–

96–33]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the New York Stock Exchange, Inc.

Relating to the Execution of Odd-Lot

Orders

February 11, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

November 25, 1996, the New York Stock

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

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I and II 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.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The proposed rule change consists of

an amendment to Exchange Rule 124

with respect to the manner in which

odd-lot market orders are priced for

execution when quotation information

in a stock is not available.

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

Currently, odd-lot market orders are

executed in the odd-lot system against

the specialist in that stock at a price

based on the ‘‘best pricing quote.’’ This

is either the NYSE quote or the best

quote from another ITS market center.

(A buy odd-lot market order is executed

at the offer price, and a sell odd-lot

market order is executed at the bid

price.) However, in situations where the

quote for a stock does not qualify as a

valid quote, either because it is

designated as a non-firm quote, or it

fails a system validation check because

it exceeds certain parameters, the

current procedure prices odd-lot

executions using the last sale price in

the round lot market.2 The Exchange

believes, however, that this may not

reflect the current market for the stock,

since the quote condition (i.e. either

non-firm or a gapped quote) suggests

strongly that the market is likely to

move away from that last price. In these

situations, the Exchange believes the

current procedure may disadvantage

customers or the specialist.

The NYSE proposes that, when oddlot market orders are entered in a

situation where a quote is not available,

designated non-firm, or where the

spread in a quote or the difference

between the quote and the last round lot

sale exceeds odd-lot system validation

guidelines,3 that the next sale or next

valid quote on the NYSE be used to

price odd-lot market orders, rather than

the last sale price. If the next quote is

not firm, the next sale would be used to

execute quote priced market orders. The

Exchange believes this would provide

more appropriate pricing of odd-lot

orders as it would reflect actual roundlot market prices at the time the odd-lot

orders are executed. The Exchange

further believes investors and specialists

would benefit from this increased

pricing accuracy.

2. Statutory Basis

The Exchange believes the proposed

rule change is designed to provide more

efficient executions of standard off-lot

market orders. In addition, the Exchange