[Federal Register Volume 63, Number 18 (Wednesday, January 28, 1998)]
[Notices]
[Pages 4337-4341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1974]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39564; File No. SR-NYSE-97-30]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Granting Approval to Proposed Rule Change and Notice of Filing 
and Order Granting Accelerated Approval of Amendment No. 1 to Proposed 
Rule Change To Amend and To Make Permanent the Allocation Policy and 
Procedures Pilot Program

January 20, 1998.

I. Introduction

    On October 20, 1997, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') submitted to the Securities and Exchange Commission 
(``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 and to obtain permanent approval of the 
Exchange's Allocation Policy and Procedures pilot program.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    The proposed rule change was published for comment in the Federal 
Register on November 7, 1997.\3\ No comments were received on the 
proposal. On January 2, 1998, the NYSE submitted Amendment No. 1 to the 
proposed rule change.\4\ This order approves the proposed rule change 
and approves Amendment No. 1 on an accelerated basis.
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    \3\ See Securities Exchange Act Release No. 39288 (October 30, 
1997) 62 FR 60297.
    \4\ See Letter from Agnes M. Gautier, Vice President, Market 
Surveillance, NYSE to Sharon Lawson, Senior Special Counsel, 
Division of Market Regulation (``Division''), Commission, dated 
December 26, 1997 (``Amendment No. 1''). In Amendment No. 1, the 
NYSE clarified the proposal with respect to: (1) Exchange 
representation at interviews between specialist units and listing 
companies; (2) Exchange review of written materials supplied by 
specialist units to listing companies; and (3) specialist unit 
contact with a listing company. In addition, Amendment No. 1 deletes 
the sentence inviting listing companies to express in a letter sent 
to the Exchange's Allocation Committee any preference not to be 
traded by specialist units which trade the stock of the listing 
companies' competitors.
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II. Background and Description of the Proposal

    The Exchange's Allocation Policy and Procedures (``Policy'') 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

[[Page 4338]]

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. On February 28, 1997, the Exchange proposed to 
change the Policy to allow greater listing company input. On March 7, 
1997, the Commission approved the proposal as a seven-month pilot 
program, effective until October 7, 1997.\5\ Subsequently, the 
Commission has approved two extensions of the Exchange's pilot program; 
the current extension expires January 16, 1998.\6\
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    \5\ See Securities Exchange Act Release No. 38372, 62 FR 13421 
(March 21, 1997) (notice of filing and immediate effectiveness of 
File No. SR-NYSE-97-04). On April 16, 1997, the Exchange filed 
another proposed change to its Policy not covered under the pilot 
program. See Securities Exchange Act Release No. 38828 (July 9, 
1997) 62 FR 39043 (July 21, 1997) (order approving File No. SR-NYSE-
97-12).
    \6\ See Securities Exchange Act Release Nos. 39206 (October 6, 
1997) 62 FR 53679 (October 15, 1997) (notice of filing and order 
granting accelerated approval of File No. SR-NYSE-97-27); and 39368 
(November 26, 1997) 62 FR 64613 (December 8, 1997) (notice of filing 
and immediate effectiveness of File No. SR-NYSE-97-32).
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    Under the pilot program, listing companies may: (1) Have the 
Allocation Committee select their specialist unit (``Option 1''); or 
(2) make the final selection of a specialist unit from among a group of 
three of five specialist units selected by the Allocation Committee 
(``Option 2''). In either case, the listing company may submit a 
generic letter to the Allocation Committee which may describe desired 
general characteristics of a specialist unit, but may not mention 
particular specialist units. Under Option 2, the listing company meets, 
either in person or by teleconference, with the specialist units 
selected by the Allocation Committee within two business days after 
their selection. The listing company must make its decision as to a 
specialist unit by the next business day.
    The Exchange is proposing several changes to the Policy in addition 
to requesting permanent approval of the pilot permitting Option 2. 
First, when the listing company selects Option 2, currently the 
Allocation Committee will select a group of three, four or five units 
that are the most qualified specialist units among the units that 
apply. It is proposed that if three units are selected, the Allocation 
Committee may select an alternate specialist unit to be among the group 
of units that a company may interview in the event a unit is 
eliminated. A specialist unit could be eliminated if it cannot meet 
with the listing company at the appointed time. A unit chosen as an 
alternate will be informed of its status as such. Currently, the policy 
is silent regarding this procedure.
    Second, the Exchange is proposing several changes covering contacts 
between specialist units and listing companies. The NYSE is proposing 
to codify in its Policy its prohibition on contact between listing 
companies and specialist units from the time allocation applications 
are solicited until Allocation Committee meetings. The current Policy 
is silent regarding contact between listing companies and specialist 
units. However, the NYSE's Information Memo No. 97-13 states that once 
allocation applications are distributed, the Exchange expects that 
specialist units will have no contact with the listing companies. The 
proposed change would codify this existing restriction into the Policy 
itself.\7\
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    \7\ The current Policy does require specialist units to describe 
in their allocation applications any contacts with the listing 
company with regard to its prospective listing on the Exchange 
within six months prior to the date that allocation applications are 
solicited. According to the NYSE, such contacts are among the 
factors considered by the Allocation Committee in allocating a stock 
to a specialist unit or selecting a unit to be interviewed by the 
listing company. See Amendment No. 1, supra note 4.
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    The proposal also would allow specialist units to provide written 
material to Exchange staff from the time of selection of an 
interviewing pool to no later than two hours before the scheduled 
interview. Exchange staff would provide the written material to the 
listing company on the day of the interview. The proposal further would 
require written material to be limited to information pertaining to the 
specialist unit, and would not permit any reference to another 
specialist unit or units, except overall floorwide statistics. In 
addition, the amended proposal would require periodic, random reviews 
of such material by Exchange staff after the allocation process has 
been completed. The NYSE represents that it will take appropriate 
regulatory action should problems with the written materials provided 
to listing companies be disclosed.\8\
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    \8\ See Amendment No. 1 supra note 4.
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    Under the terms of the proposal, a specialist unit may not supply 
information at the interview \9\ concerning another specialist unit or 
units either orally or in writing, except it may refer to overall 
floorwide statistics. The proposal would permit any information 
contained in Exchange documents to be provided by the unit orally or in 
writing on the unit's letterhead. Following its interview, the proposal 
would prohibit a specialist unit from having any contact with listing 
company and any follow-up questions by the company regarding publicly 
available information on a unit would be required to be sent to the 
Exchange. If the Exchange approves, a response would be provided. The 
proposal provides that the specialist units in the group of units 
interviewed would be advised of such requests.
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    \9\ According to the NYSE, staff of its Listing Department will 
continue to attend interviews between listing companies and 
specialist units. In addition, Exchange Regulatory staff will 
randomly attend interviews for two listings each month and conduct 
meetings with members of the Exchange's Listings staff to educate 
them on regulatory issues. See Amendment No. 1, supra note 4.
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    Third, under the Policy, the listing company's letters to the 
Allocation Committee can describe characteristics that focus on the 
specialist unit rather than the listing company. According to the NYSE, 
letters which describe the listing company are more helpful to the 
Allocation Committee in assessing the type of specialist unit that 
would be appropriate for the company. Therefore, the Exchange proposes 
to change the Policy to require that any letter submitted by the 
listing company to the Allocation Committee focus on the history and 
background of the company and its industry; how the company 
historically has funded its operations; characteristics of its 
shareholder base and any unusual trading patterns that may result 
therefrom; and any public information regarding the company's plans for 
the future. The letter may also include the company's specific views on 
being traded by a specialist unit with experience in trading in its 
industry or country.\10\
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    \10\ The NYSE also proposed to amend the Policy to invite a 
listing company to include in its letter any preference that its 
stock not be traded by specialist units which trade competitors' 
stock. In Amendment No. 1, the NYSE deleted all reference to any 
preferences the listing company may have with respect to the units 
trading competitors' stock. Listing companies will not, however, be 
prohibited from stating such a preference in letters sent to the 
Allocation Committee. See Amendment No. 1, supra note 4.
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    Fourth, under the current policys within two business days after 
the selection of a group of specialist units by the Allocation 
Committee, the listing company must meet with the specialist unit's 
representative. In addition, the listing company must select its 
specialist unit within one business day of the interview. The Exchange 
believes that these time frames have been, at times, too compressed for 
company travel arrangements or preparation by the specialist units. 
Accordingly, the NYSE is proposing to amend this portion of the policy 
to permit the listed company to meet with the selected group of 
specialist units' representatives up until the close of business on the 
last Exchange business day of the week in which the selection of the 
group was

[[Page 4339]]

made by the Allocation Committee. Further, the amended proposal 
provides that as soon as practicable, following its meeting with 
representatives of the specialist units, the listing company would be 
required to select its specialist unit. If a listing company meets with 
any of its specialist units on the last Exchange business day of the 
week, it would be required to make its decision on that day.
    Fifth, the Policy currently permits telephone interviews at the 
request of a listing company. According to the NYSE, in-person 
interviews have been shown to be more effective. Therefore, under the 
proposal, telephone interviews would not be permitted for domestic 
listing companies, unless approved by the Exchange for compelling 
circumstances. Telephone interviews would continue to be permitted for 
non-U.S. listing companies.
    Finally, the NYSE is proposing to change the Policy concerning 
spin-offs and related companies. Under the proposed revisions to the 
Policy, a listing company that is a spin-off or related company may 
choose to stay with the specialist unit registered in the related 
listed company. Currently, situations in which a listing company is a 
spin-off of or related to a listed company are handled as new listings, 
with allocation open to all specialist units. Under the terms of the 
proposal, if a listing company that is a spin-off or related company 
chooses to have the Allocation Committee select its specialist, the 
listing company may request, and the Allocation Committee will honor, 
that it not be traded by the unit that trades the related listed 
company. Alternatively, the proposal would permit the listing company 
to choose Option 2 and request that the Allocation Committee include or 
exclude the specialist unit registered in the related listed stock from 
the pool of specialist units.\11\
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    \11\ This is similar to the Policy's current approach to 
relisting and listed company mergers.
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III. Discussion

    The Commission finds that the proposed rule change, as amended, is 
consistent with the requirements of Section 6 of the Act \12\ and the 
rules and regulations thereunder applicable to a national securities 
exchange.\13\ The Commission believes that the proposed rule change is 
consistent with and furthers the objectives of Section 6(b)(5) of the 
Act \14\ in that it is designed to perfect the mechanism of a free and 
open market and to protect investors and the public interest.
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    \12\ 15 U.S.C. 78f.
    \13\ In approving this rule, the Commission notes that it has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \14\ 15 U.S.C. 78f(b)(5).
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    From the outset, the Commission has had two primary concerns 
relating to the Exchange's pilot program: (1) whether the resulting 
allocations would be based on objective factors, such as specialist 
performance, or influenced by such factors as promotional efforts of 
specialist units; and (2) whether this new procedure would create the 
appearance of impropriety between the specialist and the listing 
company and thereby undermine public confidence in the integrity of the 
marketplace. The Commission approved the new procedures as a pilot 
program to give the NYSE time to gain experience with the new 
procedures and to allow both the Exchange and the Commission additional 
time to evaluate the merits of the program.
    After assessing the results of the NYSE's pilot program, the 
Commission has determined to approve on a permanent basis the proposed 
changes to the Policy. The Commission notes that there is no evidence 
of any problems with the pilot program during its ten months of 
operation and the Commission believes that the Exchange is applying the 
established criteria appropriately. In addition, the Commission 
believes that the proposed amendments implement and enforce safeguards 
which should ensure that inappropriate or prohibited relationships 
between specialist units and listing companies do not develop.
    Specifically, the Commission believes that it is appropriate to 
continue to permit listing companies to have the choice to have greater 
input in the selection of the specialist unit that will trade the 
companies' stock. The Commission notes that listing companies retain 
the right to request the Allocation Committee to select a specialist 
unit on their behalf based on the criteria specified in the Policy.\15\ 
The Commission further notes that under Option 2, where a listing 
company has the opportunity to select its own specialist unit, it must 
do so from a group of three to five units that are selected by the 
Allocation Committee as the most qualified specialist units among the 
units that apply based on the criteria in the Policy.\16\ Because under 
either Option, the allocation criteria, which focuses primarily on 
specialist performance, must be applied by the Allocation Committee, 
the Commission believes that the allocation process will continue to 
ensure that the best qualified and performing units will be rewarded 
with allocations.
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    \15\ Under the Policy, the Allocation Committee is required to 
base allocation decisions on: (1) the results of the Specialist 
Performance Evaluation Questionnaire (``SPEQ''); (2) objective 
performance measures; and (3) the Allocation Committee's expert 
professional judgment in considering the SPEQ, objective measures of 
performance, and other enumerated criteria, such as professional 
judgment, listing company input, allocations received, capital 
deficiency, disciplinary actions, justifiable complaints and foreign 
listing considerations. The SPEQ includes several facets, including 
ratings in the current quarter, improved ratings, and ratings over 
time. Objective measures of performance considered by the Allocation 
Committee include dealer participation rates, stabilization, capital 
utilization, and near neighbor analysis, as well as timeliness of 
regular openings, promptness in seeking Floor official approval of 
non-regulatory delayed openings, timelessness of DOT turnaround, and 
response to administrative messages.
    \16\ Id.
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    Second, the NYSE's proposal contains several safeguards to ensure 
the continued integrity of the allocation process and that contacts 
between specialists and listing companies are appropriately monitored 
when Option 2 is used. In this regard, the NYSE's proposal codifies in 
its Policy its prohibition on contact between listing companies and 
specialist units from the time allocation applications are solicited 
until Allocation Committee meetings. This should help to maintain the 
integrity of the allocation process and ensure that inappropriate 
contacts and solicitations are not permitted. The Commission also notes 
that the current Policy requires specialist units to disclose all 
contacts with the listing company within six months of the date that 
allocation applications are solicited. The Commission believes that it 
is appropriate for the Allocation Committee, in allocating a stock to a 
specialist unit or selecting units to be interviewed by the listing 
company, to consider prior contacts between the listing company and the 
specialist units as a factor in the decisionmaking process.\17\
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    \17\ See Amendment No. 1, supra note 4.
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    The Commission further believes that the provisions of the proposal 
restricting written material to information pertaining to the 
specialist unit, except overall floorwide statistics, is reasonable as 
it allows specialist units to provide evidence of their own perceived 
strengths and historical performance, and will help to prevent 
unsubstantiated claims against other units also competing for the 
allocation. The NYSE has stated that it will randomly review the 
written materials supplied by specialist units to listing companies 
after the allocation process

[[Page 4340]]

has been completed to discover any inaccuracies in the material.\18\ 
While the Commission believes that prior review by Exchange staff of 
all written materials provided to listing companies would help to 
ensure that information provided by specialist units is not false, 
misleading, or ambiguous, we note that specialists are still under a 
duty to ensure that their statements, both oral and written, are not 
misleading or false. In light of the NYSE's representations that 
appropriate regulatory action will be taken in the event that any 
problems are discovered, the Commission believes that it is reasonable 
for the NYSE to initially start with a random review by Exchange staff 
of written material provided to listing companies by specialist units 
after the allocation process has been completed.\19\ If such reviews 
disclose problems with communications, we would expect the NYSE to 
consider replacing its review process with a more comprehensive one to 
be conducted prior to the allocation.
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    \18\ See Amendment No. 1, supra note 4.
    \19\ Regulatory action which the NYSE could consider would 
include reallocation of the stock.
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    In addition, the NYSE represents that all interviews between 
specialist units and listing companies will continue to be attended by 
staff of the Exchange's Listing Department. Moreover, members of the 
Exchange's Regulatory staff will randomly attend interviews for two 
listings each month and conduct meetings with members of the Exchange's 
Listings staff to educate them on regulatory issues. The Commission 
believes that the proposed procedures, without placing too great of an 
administrative burden on the Exchange's Regulatory staff, should ensure 
that any specialist units making inappropriate remarks to listing 
companies at interviews will be subject to appropriate regulatory 
action.
    Third, the Commission notes, as described above, that the proposal 
would change the requirements for listing company letters submitted to 
the Allocation Committee. Instead of requiring such letters to describe 
the desired characteristics of the specialist unit, the Policy would be 
amended to require such letters to contain detailed information 
regarding the background and operations of the listing company and its 
industry. The Commission agrees with the NYSE that specific information 
about the listing company may better assist the Allocation Committee in 
selecting the appropriate specialist unit(s). The Policy also will 
continue to prohibit the listing company from identifying a specific 
specialist unit in its letter to the Allocation Committee. These 
requirements together should ensure that the Allocation Committee will 
be able to select the most qualified units based on the allocation 
criteria. Accordingly, the Commission finds that the proposed 
provisions relating to the company's letter are consistent with the 
Act.
    Fourth, the Commission notes that the proposal would generally 
relax the time frames during which a listing company must meet with and 
select a specialist unit from the group of units selected by the 
Allocation Committee. The proposed rule allows the listing company to 
meet with the selected group of specialist units' representatives by 
the close of business on the last Exchange business day of the week in 
which the selection of the group was made, rather than within two 
business days. In addition, the Policy is being changed to permit the 
listing company to select its specialist unit as soon as practicable, 
as opposed to within one business day, following its meeting with 
representatives of the specialist units.\20\ The NYSE has represented 
that most Allocation Committee meetings occur on Mondays.\21\ 
Accordingly, for most allocations, listing companies will have more 
time to meet (a total of five business days between Monday and Friday, 
rather than two) and select their specialist unit. The Commission 
further notes that should compelling circumstances prevent the required 
meetings within the established time frames, the proposal grants the 
Exchange discretion to permit telephone interviews for domestic listing 
companies.\22\ Otherwise, the proposal would permit telephone 
interviews solely for non-U.S. listing companies. The Commission 
believes that the proposed time frames are reasonable and should allow, 
in most cases, sufficient opportunity for specialist units to prepare 
for the interviews and for listing companies to arrange to meet with 
representatives of the selected specialist units.
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    \20\ As noted above, under the amended Policy, if a listing 
company meets with any of its specialist units on the last Exchange 
business day of the week, it must make its decision on that day.
    \21\ Telephone conversation between Donald Siemer, Director, 
Rule Development, NYSE, and Deborah Flynn, Attorney, Division, 
Commission, on November 3, 1997.
    \22\ The Exchange stated in its filing that in-person interviews 
have shown to be more effective. Accordingly, telephone interviews 
generally are not permitted unless the NYSE approves of it for 
compelling circumstances. The Exchange has stated that compelling 
circumstances would include bad weather, which may severely hamper a 
listing company's ability to attend a scheduled interview. Telephone 
conversation between Donald Siemer, Director, Rule Development, 
NYSE, and Deborah Flynn, Attorney, Division, Commission, on November 
3, 1997.
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    Fifth, the Commission believes that the Exchange's deletion of the 
proposed sentence in the Policy inviting a listing company to include 
in its letter to the Allocation Committee its preference not to be 
traded by specialist units trading competitors' stock is appropriate 
and consistent with the Act. The Commission believes that the existence 
of the provision would serve only to encourage the expression of such 
preferences and consequently, to unnecessarily limit the pool of 
specialist units to be selected by the Allocation Committee. In 
addition, the Commission does not believe there is any regulatory 
reason to prohibit a specialist unit from trading competitors' stock. 
Indeed, a specialist's market making expertise in a certain industry 
may actually prove to be a benefit to a listing company. Although the 
Policy will not prohibit listing companies from expressing such 
preferences in letters to the Allocation Committee, the Commission 
believes that the absence of the provision in the Exchange's Policy 
should enhance competition among specialist units to the benefit of 
both listing companies and the Exchange.
    Sixth, the proposal allows the Allocation Committee to select an 
alternate unit in cases in which only three units are selected to be 
interviewed. The Commission recognizes that based on the established 
time frames, situations may arise in which either the listing company 
or a particular specialist unit cannot meet at the appointed time. 
Accordingly, the Commission believes that when only three specialist 
units are selected by the Allocation Committee, the selection of an 
alternate unit to be interviewed by the listing company is reasonable 
and will ensure an adequate pool from which to select a specialist.
    Finally, the Commission believes that the NYSE's proposal to allow 
a listing company that is a spin-off of or related to a listed company 
to choose to stay with the specialist unit for the related company is 
reasonable because of the relationship between the spun-off company and 
the former company. The proposal also requires the Allocation Committee 
to honor the spin-off company's request not to be allocated to the 
specialist unit that had traded the related company's stock. The 
Commission recognizes that both allowing the spin-off company to stay 
with the original specialist unit and barring the original specialist 
unit from receiving the listing does raise some concerns about ensuring 
that all specialist units will be allowed to

[[Page 4341]]

compete for the allocation on an equal basis. Nonetheless, the 
Commission believes that there may be legitimate reasons why an 
unlisted company may want to remain with the related company's 
specialist unit or may believe it is more appropriate to be allocated 
to a new specialist unit rather than the one that has dealings with the 
related company. For the same reasons, the Commission believes that the 
provisions which allow a listing company to choose Option 2 and request 
that the Allocation Committee include or exclude the specialist unit 
registered in the related listed stock are reasonable. Accordingly, the 
Commission finds these provisions are consistent with the Act.
    The Commission finds good cause for approving proposed Amendment 
No. 1 prior to the thirtieth day after the date of publication of 
notice of filing thereof in the Federal Register. The Commission notes 
that Amendment No. 1 further clarifies the process by which listings 
are allocated to specialist units and raises no new regulatory issues. 
Specifically, Amendment No. 1 interprets the Policy's provisions 
relating to interviews between listing companies and specialist units, 
written materials provided to listing companies by specialist units, 
and specialist units' contact with listing companies during the six 
month period prior to the solicitation of allocation applications and 
helps to strengthen the proposal and ensure compliance with the Policy. 
Regarding the deletion of the proposal to permit listing companies to 
state their preference not to be traded by units trading competitors' 
stock, the Commission notes that the elimination of this provision, 
which would have further restricted the pool of specialist units to be 
allocated a particular listing, raises no issues of regulatory concern. 
Finally, the Commission notes that no comments were received on the 
publication of the proposal or at the time of the approval and 
subsequent extensions of the pilot program. Accordingly, the Commission 
believes that good cause exists, consistent with Section 6(b)(5) of the 
Act,\23\ to approve Amendment No. 1 to the NYSE's proposed rule change 
on an accelerated basis.
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    \23\ 15 U.S.C. 78f(b)(5).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning Amendment No. 1. 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 all such filings will also be 
available for inspection and copying at the principal office of the 
NYSE. All submissions should refer to File No. SR-NYSE-97-30 and should 
be submitted by February 18, 1998.

V. Conclusion

    The Commission believes that the Exchange's amended pilot program, 
which allow greater listing company input, has been crafted to ensure 
that allocation decisions continue to be based primarily on specialist 
performance and objective criteria. In addition, the Commission 
believes that the procedures adopted by the NYSE in the Policy will 
help to identify, minimize and penalize potential conflicts arising out 
of the relationships between specialist units and listing companies and 
ensure the continued integrity of the allocation process. Based on 
this, we believe the permanent approval of Option 2, along with the 
amendments to the Policy, are reasonable and consistent with the 
requirements of the Act applicable to a national securities exchange, 
and in particular, with the requirements of Section 6 of the Act \24\ 
and the rules and regulations thereunder.
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    \24\ 15 U.S.C. 78f.
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    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\25\ that the proposed rule change (SR-NYSE-97-30), including 
Amendment No. 1, is approved.

    \25\ 15 U.S.C. 78s(b)(2).
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    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\26\
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    \26\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-1974 Filed 1-27-98; 8:45 am]
BILLING CODE 8010-01-M