

[Federal Register: October 4, 2006 (Volume 71, Number 192)]
[Notices]               
[Page 58645-58646]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04oc06-99]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54530; File No. SR-NYSE-2006-49]

 
 Self-Regulatory Organizations; New York Stock Exchange LLC; 
Order Approving Proposed Rule Change and Amendment No. 1 Thereto 
Relating to Amending Rule 123D (Openings and Halts in Trading) and Rule 
15 To Shorten the Minimum Required Time Periods Between Tape 
Indications and Openings or Reopenings

September 28, 2006.
    On June 30, 2006, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with 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 NYSE Rules 123D and 15 to shorten the 
minimum time periods between tape indications and openings or 
reopenings of a security and after an ``Equipment Changeover.'' \3\ On 
August 14, 2006, the Exchange submitted Amendment No. 1 to the proposed 
rule change.\4\ The proposed rule change, as amended, was published for 
comment in the Federal Register on August 28, 2006.\5\ The Commission 
received no comments regarding the proposal. This order approves the 
proposed rule change, as amended.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Exchange Rule 123D(2).
    \4\ In Amendment No. 1, NYSE made minor revisions to the 
proposed rule text and clarified that all market participants may 
react to published price indications.
    \5\ See Securities Exchange Act Release No. 54337 (August 21, 
2006), 71 FR 50963 (``Notice'').
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    The Exchange proposes to amend NYSE Rules 123D and 15 to shorten 
the minimum time periods between tape indications and openings or 
reopenings of a security and after an ``Equipment Changeover.'' In 
connection with a delayed opening of trading in a security, Exchange 
Rule 123D currently requires a minimum of ten minutes to elapse between 
the first price indication and the opening of the stock, and where 
there is more than one indication, a minimum of five minutes to elapse 
after the last indication, provided in all cases that at least ten 
minutes have elapsed since the first indication. The Exchange's 
proposal would reduce these minimum time periods from ten to three 
minutes after the first indication, and to one minute after the last 
indication, provided that a minimum of three minutes have elapsed since 
the first indication.
    With respect to the reopening of trading after a stock has been 
halted during the trading day, Exchange Rule 123D currently requires a 
minimum of five minutes to elapse between the first indication and the 
reopening of trading, and a minimum of three minutes to elapse after 
the last indication, provided that at least five minutes has elapsed 
since the first indication. The Exchange's proposal would reduce these 
minimum time periods to three minutes after the first indication, and 
to one minute after the last indication, provided that a minimum of 
three minutes has elapsed since the first indication.
    With respect to the reopening of trading after a stock has been 
halted during the trading day because of ``Equipment Changeover,'' 
Exchange Rule 123D currently requires a minimum of five minutes to 
elapse before trading resumes following an Equipment Changeover. 
Further, if, during the ``Equipment Changeover'' trading halt, a 
significant order imbalance \6\ develops or a regulatory condition 
occurs, the nature of the halt will be changed and notice must be 
disseminated and trading cannot resume until ten minutes after the 
first indication of the new halt condition. The Exchange's proposal 
would reduce these minimum time periods to one minute after an 
``Equipment Changeover'' and to three minutes after an ``Equipment 
Changeover'' during which a significant order imbalance or regulatory 
condition develops.
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    \6\ The Exchange indicated in the Notice that a ``significant 
order imbalance'' is one which would result in a price change from 
the last sale of one point or more for stocks under $10, the lesser 
of 10% or three points for stocks between $10-$99.99 and five points 
for stocks $100 or more--unless a Floor Governor deems circumstances 
warrant a lower parameter.
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    Lastly, NYSE proposes to amend Exchange Rule 15 to conform with a 
recent amendment to the Intermarket Trading System Plan (``ITS Plan''). 
In particular, the Exchange's proposal would require that, when more 
than one indication is disseminated, a stock may reopen one minute 
after the last indication if three minutes have elapsed after the first 
indication.
    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.\7\ 
Specifically, the Commission finds that the proposal is consistent with 
Section 6(b)(5) of the

[[Page 58646]]

Act,\8\ which requires, among other things, that the rules of a 
national securities exchange be 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 proposal appears 
designed to strike a reasonable balance between preserving the 
opportunity for price discovery before a stock opens or reopens while 
providing timely opportunities for investors to participate in the 
market.
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    \7\ In approving this proposed rule change the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b)(5).
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    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\9\ that the proposed rule change (SR-NYSE-2006-49), as amended, is 
approved.
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    \9\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-16367 Filed 10-3-06; 8:45 am]

BILLING CODE 8010-01-P
