Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / Notices 22595

13The rule filing and Amendment No. 1, see

supra note 1, propose to exclude stocks which have

been delisted for more than six months based upon

the current rolling twelve month performance

review period. However, because the Exchange is

proposing to change the review period to a rolling

three month period, the Exchange will amend the

filing to provide that stocks which have been

delisted for more that half the review period will

be excluded. Conversation between Don Siemer,

NYSE, and Katherine Simmons, SEC, May 1, 1995.

to the calculated average of their near

neighbors. A ‘‘Mean’’ group stock will

be considered to have ‘‘relatively high

performance’’ if its performance

percentage is in the top quartile of all

stocks in its stock category (i.e., top 200,

next 300, or other).

Each specialist unit would receive

three reports each month containing the

results of the near neighbor analyses for

the three most recent months combined.

These would include: (1) A Stock Detail

Report for each stock that provides

market data and performance

information about the stock and each of

the other stocks that were identified as

its ‘‘near neighbors,’’ (2) a Stock

Summary Report that lists each stock

and provides data on the performance of

the target stock and the average

performance of its near neighbors, as

well as whether the target stock’s

performance is ‘‘Below Mean,’’ ‘‘Mean,’’

or ‘‘Above Mean,’’ for each performance

measure, and (3) a Specialist Unit

Summary Report that shows, for each

performance measure and within each

stock category, the number of stocks that

are in each group classification, and the

percentage of the unit’s total stocks that

are in each group classification. The

Unit Summary Report also shows the

percentage of the unit’s ‘‘Mean’’ group

stocks that had high performance

percentages.

The Allocation Committee would

receive only the summary data

appearing on the Specialist Unit

Summary Report, which will be

updated each month (covering the three

most recent months) upon the

distribution of the reports to the

specialist units. The Allocation

Committee would not receive

performance data for individual stocks.

The Allocation Committee would also

receive a list of each unit’s stocks that

had fewer than three near neighbors and

were automatically classified in the

‘‘Mean’’ group. Included with each

stock will be its percentage of the unit’s

total dollar value of shares traded.

The Exchange is proposing that this

new approach to measuring specialist

performance be implemented on a

fifteen month pilot basis. During the

pilot period, the Exchange will continue

to study the near neighbor methodology

with a view toward recommending such

enhancements or modifications as may

be appropriate as experience is gained

with this approach to evaluating

specialist performance.

The Exchange is also proposing the

following modifications to the specialist

capital utilization performance measure

to ensure commonality between it and

near neighbor: (1) Exclusion of stocks

with two classes of shares (e.g., Class A

& Class B), ‘‘merger/acquisition’’ stocks

if there was a significant impact on the

price or volume, and stocks that have

been delisted for more than half of the

examination period; 13 and (2) reduction

of the performance review period from

a ‘‘rolling’’ 12 months to a rolling three

months. With respect to the new

exclusion for stocks with two classes of

shares and stocks subject to merger and

acquisition activity that significantly

impacts the price or volume of the

subject security, the Exchange believes

the stocks’ trading patterns to be such

that they cannot reasonably be

compared to other stocks that do not

trade in the same manner. The

performance review period is proposed

to be reduced to a rolling three month

period in order to give more prompt

feedback of performance changes.

2. Statutory Basis

The basis under Act for this proposed

rule change is the requirement under

Section 6(b)(5) of the Act that an

Exchange have 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 a national market

system and, in general, to protect

investors and the public interest. The

Exchange believes that the proposed

rule change is consistent with these

requirements in that developing

objective measures of specialist

performance using a near neighbor

approach would help perfect the

mechanism of a free and open market.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate 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

Within 35 days of the publication of

this notice in the Federal Register or

within such other period (i) as the

Commission may designate up to 90

days of such date if it finds such longer

period to be appropriate and publishes

its reasons for so finding or (ii) as to

which the self-regulatory organization

consents, the Commission will:

(A) By order approve the proposed

rule change, or

(B) Institute proceedings to determine

whether the proposed rule change

should be disapproved.

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 at

the Commission’s Public Reference

Section, 450 Fifth Street, N.W.,

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–95–

05 and should be submitted by May 30,

1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–11230 Filed 5–5–95; 8:45 am]

BILLING CODE 8010–01–M