63280 Federal Register / Vol. 65, No. 205 / Monday, October 23, 2000 / Notices

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 42863

(May 30, 2000), 65 FR 36488 (June 8, 2000)

(proposing to append an identifier suffix to the

ticker symbols of securities that are pending

delisting status or that have been determined by

Exchange staff to warrant suspension and delisting). 4 Id.

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

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

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43442; File No. SR–NYSE–

00–40]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the New

York Stock Exchange, Inc. Regarding

Section 804 of the Exchange’s Listed

Company Manual

October 13, 2000.

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

Securities Act of 1934 (‘‘Act’’) 1 and

Rule 19b–4 thereunder,2 notice is

hereby given that on September 29,

2000, 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.

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 Exchange’s amended delisting

appeal procedures provide for notice

regarding the status of an affected

company. In lieu of the ticker symbol

suffix originally proposed,3 the

Exchange proposes to utilize a

combination of ticker and information

notices and web site information to

supplement the press release notice

provided for in Section 804 of the NYSE

Listed Company Manual.

The text of the proposed rule change

is available at the Office of the

Secretary, the Exchange and at the

Commission.

II. Self-Regulatory Organization’s

Statements 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

In a filing made last year and recently

approved by the Commission, the

Exchange amended its procedures for

delisting a security and the

accompanying Exchange appeals

process available to the issuer.4 In

addition to providing that securities

may continue trading pending an

appeal, the Exchange proposed to

append a suffix (.DL) to the ticker

symbol of the security involved. The

indicator was one of the ways the

Exchange intended to inform the

investing public and investment

decision-makers that this particular

company was no longer in compliance

with NYSE continued listing standards

and that the delisting of the security was

pending and, when applicable, subject

to appeal to the Exchange’s board.

The Exchange has now determined

that, absent significant systems changes

that would require considerable time

and expense, appending a suffix would

in fact change a company’s ticker

symbol. Therefore, an investor or broker

would have to know to enter the symbol

with a .DL into a quotation device to

obtain a quote or see the last sale.

Entering the normal one, two or three

letter symbol would elicit the message

‘‘security not found.’’ This would not

meet the Exchange’s goal of informing

interested parties of the status of the

security. In addition, clearance and

settlement systems do not recognize a

non-alpha character in a ticker symbol,

so there would be confusion between a

security with a .DL suffix and another

security with a different, longer ticker

symbol that uses .DL as its last two

characters.

Even if the systems work were done

to allow use of the suffix without a

complete symbol change, the Exchange

is concerned that it could not be

confident that the suffix would be

carried by every vendor. This would

obviate the purpose behind the use of

the suffix.

As a result, the Exchange has not yet

implemented the amended procedures.

In order to do so, in lieu of the .DL

suffix, the Exchange proposes to employ

the following mechanisms to achieve

the information dissemination

contemplated by the rule:

a. The Exchange proposes to circulate

a ticker notice each day prior to the

opening, specifying the delisting status

of each company in question.

b. The Exchange proposes to have the

same information notice distributed

daily via the Exchange’s online

information notices system to vendors,

member firms and other interested

parties notifying them of the status of

the listed company.

c. The Exchange proposes to have a

company’s delisting status noted with

the company information on the

Exchange’s web site.

The Exchange believes that these

steps will better disseminate

information to all market participants,

both professional and nonprofessional,

on the subject companies than would

the .DL suffix. The Exchange also

believes that it is important to note that

the entire notification process begins

with a press release regarding the

delisting determination made by the

Exchange staff. The public is then

updated with further press releases

when a company decides to appeal, and

when that appeal is decided. As a result,

that record will be available to anyone

who checks for news on the company.

2. Statutory Basis

The Exchange believes the proposed

rule change is consistent with section

6(b) of the Act 5 in general and furthers

the objectives of section 6(b)(5) of the

Act 6 in particular, in that it is designed

to prevent fraudulent and manipulative

acts and practices, to promote just and

equitable principles of trade, to foster

cooperation and coordination with

persons engaged in facilitating

transactions in securities, 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

The Exchange does not believe that

the proposed rule change will impose

any burden on competition.

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.

Federal Register / Vol. 65, No. 205 / Monday, October 23, 2000 / Notices 63281

7 15 U.S.C. 78s(b)(3)(A)(i).

8 17 CFR 240.19b–4(f)(1).

9 17 CFR 200.30–2(a)(12).

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

2 17 CFR 240.19b–4.

3See Securities Exchange Act Release No. 43177

(Aug. 18, 2000), 65 FR 51889 (Aug. 25, 2000).

4The Phlx has imposed a payment for order flow

fee on certain designated transactions of Phlx

specialists and registered options traders. The funds

are made available to Phlx specialists, who may use

the funds to pay order flow providers for their

options order flow. In publishing the Phlx’s

proposed rule change, the Commission stated its

concerns that brokers who are paid to send their

customers’ orders to one exchange have a conflict

of interest that may reduce their commitment to the

duty they owe the customers to obtain the best

execution available. See Securities Exchange Act

Release No. 43177 (Aug. 18, 2000), 65 FR 51889

(Aug. 25, 2000).

5AUTOM is the Phlx’s electronic order routing,

delivery, execution, and reporting system for equity

and index options. See Phlx Rule 1080.

6AUTO-X, the automatic execution feature of

AUTOM, automatically executes public customer

market and marketable limit orders for certain strike

prices and expiration months in equity and index

options. See Phlx Rule 1080.

7The X.Station is an electronic order book on the

Phlx options floor. See Securities Exchange Act

Release No. 42006 (Oct. 13, 1999), 64 FR 57180

(Oct. 22, 1999).

8The Phlx expects that this report may be revised

to accommodate any suggested revisions of

specialist units, order flow providers, Phlx staff, or

others in order to enhance the report’s effectiveness.

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)(i) of the Act 7 and Rule 19b–

4(f)(1) thereunder because the proposed

rule change constitutes a stated policy,

practice, or interpretation with respect

to the meaning, administration, or

enforcement of an existing rule.8 At any

time within 60 days of the filing of such

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 purpose of the Act.

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 NYSE. All

submissions should refer to File No.

SR–NYSE–00–40 and should be

submitted by November 13, 2000.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–27136 Filed 10–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43436; File No. SR–PHLX–

00–83]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Philadelphia Stock Exchange, Inc. To

Distribute Quality of Execution Reports

to Specialists and Order Flow

Providers

October 11, 2000.

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

September 5, 2000, the Philadelphia

Stock Exchange, Inc. (‘‘Phlx’’ 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 Phlx. 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 Phlx proposes to provide reports

regarding the quality of execution of

option orders in connection with its

new payment for order flow fee.3 The

text of the proposed rule change is

available at the principal offices of the

Phlx.

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

Phlx 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 Phlx has prepared

summaries, set forth in sections A, B

and C below, of the most significant

aspects of the statements.

A. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In view of recent developments in

options trading, including the Phlx’s

new payment for order flow fee, the

Phlx has determined to provide Phlx

specialists and order flow providers

with sufficient information for them to

determine whether order flow providers

are receiving the best execution of their

customers’ orders at the Phlx.4

Specifically, the Exchange intends to

distribute detailed daily and summary

monthly Quality of Execution Reports to

order flow providers and specialist units

with respect to all orders delivered

through the Phlx’s Automated Options

Market (‘‘AUTOM’’) System.5 The Phlx

represents that Quality of Execution

Reports will reflect all orders that are

entered electronically through AUTOM

and are executed either by AUTO–X 6 or

by a specialist with the assistance of

X.Station.7 Quality of Execution Reports

are designed to provide statistical data

so that firms may analyze whether the

orders they directed to the Phlx received

the best execution. The Exchange

initially intends for the Quality of

Execution Reports to list the national

best bid or offer (‘‘NBBO’’) that

prevailed at the time AUTOM received

each order and to identify the execution

price, the execution volume, and the

speed of execution for each order.8

Initially, the report will also identify

trades that may have been executed

outside of the NBBO and will show

what action, if any, was taken to adjust

the price. For trades that were not

executed at the NBBO, the information

will be reported on an intraday basis to

the Exchange’s Surveillance Department

staff, who will assist members involved

in the trade in deciding whether a price