Federal Register / Vol. 66, No. 80 / Wednesday, April 25, 2001 / Notices 20845

17 15 U.S.C. 78f(b)(5) and 78f(b)(8).

18 In approving this rule, the Commission has

considered the proposed rule’s impact on

efficiency, competition, and capital formation. 15

U.S.C. 78c(f).

19 15 U.S.C. 78k(b).

20 17 CFR 240.11b–1.

21See, e.g., 17 CFF 240.11b–1; NYSE Rule 104.

22See supra note 11 at 48316; see also NYSE Rule

79A.

23Currently, the exchanges have adopted a

minimum price variation of a penny. See Securities

Exchange Act Release No. 42914 (June 8, 2000).

24 15 U.S.C. 78s(b)(2).

25 17 CFR 200.30–3(a)(12).

proposed rule change. Specifically, the

NYSE responded that the proposal does

not undermine the NMS or Rule 19c–1

because the proposal does not impose

any restrictions on the routing of

customer orders. The proposal only sets

standards for a specialist’s market maker

bid or offer on the exchange. The NYSE

also stated that the proposal is

consistent with the OHR because it does

not impose any restrictions on a

specialist’s responsibility to display

customer orders.

Further, the NYSE wrote that the

proposal does not impose any burden

on competition not necessary or

appropriate in furtherance of the

purposes of the Act with respect to the

routing of customer limit orders to ECNs

or other market centers. The NYSE

opined that the restriction on specialists

is appropriate because it is designed to

ensure that specialists’ dealer capital is

committed to meeting their affirmative

obligation to maintain fair and orderly

markets in the primary market in which

they are registered as dealers. Finally,

the NYSE argued that each market

center would determine its own decimal

trading variation. If these variations are

the same, then the restriction against

bidding or offering at a variation not

permitted on the Exchange will not

apply. In any event, the NYSE suggested

that contra side order flow would seek

to trade at whatever variation it chooses.

IV. Discussion

The Commission finds that the

proposed rule change is consistent with

the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange, and, in particular, with the

requirements of section 6(b)(5) and

6(b)(8).17 Section 6(b)(5) requires that

the rules of an exchange be designated

to promote just and equitable principles

of trade, and, in general, to protect

investors and the public interest.18

Section 6(b)(8) requires that the rules of

an exchange do not impose any burden

on competition not necessary or

appropriate in furtherance of the

purposes of the Act. Further, the

Commission finds that the proposal is

consistent with section 11(b) of the

Act 19 and Rule 11b–1 thereunder,20

which allow exchanges to promulgate

rules relating to specialists to ensure

orderly markets.

Specialists play a crucial role in

providing stability, liquidity, and

continuity to the trading of securities on

the Exchange. In return for the privilege

of serving as the only specialist in

stocks traded on the NYSE, which as the

primary market for listed stocks

continues to receive a significant

percentage of the order flow, the NYSE

improves conditions designed to

improve the quality of its market.

Among the obligations imposed upon

specialists by the Exchange, and by the

Act and rules thereunder, is the

maintenance of an orderly market in

designated securities.21 To ensure that

specialists fulfill these obligations, it is

important that the Exchange have the

ability to implement rules and develop

measures to guide and improve

specialists’ performance. The

Commission believes that the proposal

is consistent with the Exchange’s

objective to promote the maintenance of

orderly markets because it enhances the

Exchange’s ability to encourage

improved specialist performance and

market quality by clarifying specialists’

duty at the NYSE—to quote his or her

best bid and offer on the Exchange.

The Commission carefully considered

the concerns expressed by Archipelago

and AICM in their letters opposing the

proposal. Although the proposed rule

change places restrictions on specialists,

the Commission finds that the

restrictions are reasonable. First, NYSE’s

proposal only applies to the bids and

offers of individual specialists on the

floor of the Exchange. The Commission

notes that the NYSE has amended the

proposal so that it no longer applies to

affiliates of individual specialists.

Therefore, the proposal is limited to the

firms that benefit from the privilege of

acting as specialists on the NYSE.

Second, the proposal is not inconsistent

with Rule 19c–1 because it does not

impose restrictions on the routing of

customer orders. Third, it is not

inconsistent with the OHR because it

does not impose restrictions on a

specialist’s responsibility to display

customer orders. Specialists will

continue to have an obligation under the

OHR to display a customer limit order

that betters their quote.22 Fourth,

exchanges have historically maintained

a minimum increment for quoting and

trading listed securities on the exchange

in order to ensure fair and orderly

trading, including capacity limitations

of exchange computer systems.23 Fifth,

as discussed above, exchanges need to

have the ability to set standards for

specialists’ performance. This proposal

with allow specialists to meet their

obligations by ensuring that if a

specialist places a superior priced bid or

offer on an ECN or other market center,

the specialist can trade at his or her best

bid or offer with contra-side marketable

orders received on the Exchange.

For these reasons, the Commission

finds that the proposal is consistent

with the Act, including sections 6(b)(5),

6(b)(8) and 11(b), in that it does not

impose any burden on competition that

is not necessary or appropriate in

furtherance of the Act.

V. Conclusion

It is Therefore Ordered, pursuant to

section 19(b)(2) of the Act,24 that the

proposed rule change (SR–NYSE–97–

18), as amended, is approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.25

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 01–10232 Filed 4–24–01; 8:45 am]

BILLING CODE 8010–01–M

OFFICE OF THE UNITED STATES

TRADE REPRESENTATIVE

[Docket No. 301–121]

Notice of Change in Location of Public

Hearing: Intellectual Property Laws

and Practices of the Government of

Ukraine

AGENCY: Office of the United States

Trade Representative.

ACTION: Notice.

SUMMARY: The location of the public

hearing scheduled for April 27, 2001 in

the Section 302 investigation of the

intellectual property laws and practices

of the Government of Ukraine has been

changed to the Office of the United

States Trade Representative, 1724 F

Street, NW., Rooms 1 and 2,

Washington, DC.

FOR FURTHER INFORMATION CONTACT:

Sybia Harrison, Staff Assistant to the

Section 301 Committee, (202) 395–3419;

or William Busis, Associate General

Counsel, (202) 395–3150.

SUPPLEMENTARY INFORMATION: In a notice

published on April 6, 2001 (66 FR

20846 Federal Register / Vol. 66, No. 80 / Wednesday, April 25, 2001 / Notices

18,346), the Office of the United States

Trade Representative announced the

initiation of a Section 302 investigation

of the intellectual property laws and

practices of the Government of Ukraine,

and scheduled a public hearing for

April 27, 2001. The location of the

public hearing has been changed to the

Office of the United States Trade

Representative, 1724 F Street, NW.,

Rooms 1 and 2, Washington, DC. The

hearing will begin at 10 a.m. on April

27, 2001.

William Busis,

Chairman, Section 301 Committee.

[FR Doc. 01–10269 Filed 4–24–01; 8:45 am]

BILLING CODE 3190–01–U

OFFICE OF THE UNITED STATES

TRADE REPRESENTATIVE

Trade Policy Staff Committee; Notice

of Initiation of Environmental Review

and Request for Comment on Scope of

Environmental Review of Mandated

Multilateral Trade Negotiations on

Agriculture and Services in the World

Trade Organization

AGENCY: Office of the United States

Trade Representative.

ACTION: Notice and request for

comments.

SUMMARY: Pursuant to Executive Order

13141 (64 FR 63169), this publication

gives notice that the Office of the United

States Trade Representative (USTR) is

initiating an environmental review of

the multilateral trade negotiations on

agriculture and services in the World

Trade Organization (WTO). The Trade

Policy Staff Committee (TPSC) requests

written comment from the public

concerning what should be included in

the scope of the environmental review

(including the potential environmental

effects that might flow from agreements

on agriculture and services and the

potential implications for

environmental laws, regulations, and

other obligations) and the best time to

conduct the analysis.

DATES: Public comments should be

received no later than July 27, 2001.

FOR FURTHER INFORMATION CONTACT: For

procedural questions concerning public

comments, contact Gloria Blue,

Executive Secretary, TPSC, Office of the

USTR, 1724 F Street, NW., Washington,

DC 20508, telephone (202) 395–3475.

Questions concerning the

environmental review should be

addressed to Joseph Ferrante,

Environment and Natural Resources

Section, telephone 202–395–7320.

SUPPLEMENTARY INFORMATION:

Executive Order 13141—

Environmental Review of Trade

Agreements in November, 1999, 64 FR

13141 (Nov. 16, 1999), and its

implementing guidelines, 65 FR 79442

(Dec. 19, 2000), formalize the U.S.

policy of conducting environmental

reviews for certain major trade

agreements. Reviews are used to

identify potentially significant

environmental impacts (both positive

and negative), and information from the

review may facilitate consideration of

appropriate responses where impacts

are identified.

The Executive Order identifies certain

types of agreements for which an

environmental review is mandatory:

Comprehensive multilateral trade

rounds; bilateral or plurilateral free

trade agreements; and major new trade

liberalization agreements in natural

resource sectors. For other types of

agreements, the Executive Order and

guidelines direct USTR, through the

TPSC, to determine whether a review is

warranted based on such factors as the

potential significance of reasonably

foreseeable positive and negative

environmental impacts.

The World Trade Organization (WTO)

Agreement on Agriculture and the

General Agreement on Trade in Services

(GATS) call for WTO members to

undertake further negotiations to

liberalize trade in agriculture and

services, respectively. The agriculture

and services negotiations (known as the

‘‘built-in agenda’’ for agriculture and

services) are currently underway in the

WTO. USTR provided general

background on the negotiations and

requested public comment on general

U.S. negotiating objectives as well as

country and item-specific export

priorities for agriculture and services in

previous Federal Register notices. See

65 FR 16450 (Mar. 28, 2000); 66 FR

18141 (April 5, 2001).

In June, 2000, the United States

submitted a proposal for long-term,

comprehensive agricultural reform in

the WTO. The proposal calls for

substantial reductions or elimination of

tariffs, expansion of remaining tariff-rate

quotas, elimination of export subsidies,

disciplines on the use of export

restrictions on agricultural products,

simplification of rules applying to

domestic support, and establishment of

a ceiling on trade-distorting support that

applies equally to all countries. The

United States presented a more detailed

position on the tariff rate quota element

of the proposal. The U.S. proposals are

available on USTR’s website at

www.ustr.gov.

In July, 2000, the United States

submitted a comprehensive proposal

concerning the conduct of the services

negotiations and presented 12 detailed

negotiating proposals in December,

2000, addressing 11 services sectors

(accountancy services; audiovisual and

related services; distribution services;

education and training services; energy

services; environmental services;

express delivery services; financial

services; legal services;

telecommunications, value-added

network, and complementary services;

and tourism services) and one GATS

‘‘mode of supply’’ (movement of natural

persons). The U.S. proposals (also

available on the USTR website) seek to

remove market access, national

treatment, and other restrictions

affecting services and services suppliers

in these and other areas, while

maintaining the ability to regulate in the

public interest. Thus, the sectoral

coverage of the services negotiations is

broad. This notice requests commenters’

views, in particular, on which service

sectors to address or not to address in

the environmental review.

Pursuant to the Executive Order and

guidelines, USTR has determined

through the TPSC that the built-in

agenda negotiations in agriculture and

services warrant an environmental

review. The volume of trade affected in

both agriculture and services is

significant. U.S. agricultural trade in

2000 was over $100 billion. U.S. exports

of commercial services (i.e., excluding

military and government) were $255

billion in 1999, supporting over 4

million services and manufacturing jobs

in the United States. Cross-border trade

in services accounts for more than 25

percent of world trade, or about $1.4

trillion annually. U.S. commercial

services exports have more than

doubled over the last 11 years,

increasing from $118 billion in 1989 to

$255 billion in 1999.

Agricultural trade can be expected to

have implications for land resource use,

which in turn may have implications for

the environment (e.g., water quality and

quantity issues). In addition, the United

States has previously undertaken

analyses that have indicated potential

environmental benefits resulting from

elimination of agricultural export

subsidies, a key U.S. objective in the

negotiations. Further examination of

this issue might be appropriate in the

environmental review.

The Executive Order and guidelines

provide flexibility concerning the

appropriate time for undertaking the

analytical work supporting an

environmental review, once it is

initiated. In recognition of the fact that

the agriculture and services negotiations

are still at a preliminary stage, the