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42608 Federal Register / Vol. 70, No.

141 / Monday, July 25, 2005 / Notices

the underwriter to the MSRB would be timeframe is likely to be low.’’ 19 BMA only one method. The Commission will
similarly modified. concluded that ‘‘[t]he current uniform post all comments on the Commission’s
rule based on sale date covering both Internet Web site (http://www.sec.gov/
c. Submission of Official Statements to paper and electronic delivery of official rules/sro.shtml). Copies of the
the MSRB Under Rule G–36 statements is easier for compliance and submission, all subsequent
The original draft amendments to audit purposes.’’ amendments, all written statements
MSRB Response. The MSRB has with respect to the proposed rule
Rule G–36 published in the May 2004
determined not to take action on the change that are filed with the
Notice would have provided alternative
original draft amendments to Rule G–36 Commission, and all written
timeframes for complying with the
at this time but will continue to closely communications relating to the
official statement submission
monitor the official statement proposed rule change between the
requirements for primary offerings
dissemination process. Commission and any person, other than
subject to SEC Rule 15c2–12, based on
III. Date of Effectiveness of the those that may be withheld from the
when the issues close. Thus, an
Proposed Rule Change and Timing for public in accordance with the
underwriter would have been permitted
Commission Action provisions of 5 U.S.C. 552, will be
to comply with Rule G–36 by sending
available for inspection and copying in
the official statement to the MSRB by no Within 35 days of the date of the Commission’s Public Reference
later than five business days prior to the publication of this notice in the Federal Room. Copies of such filing also will be
bond closing (or three business days Register or within such longer period (i) available for inspection and copying at
prior to closing if submitted as the Commission may designate up to the MSRB’s offices. All comments
electronically through the e-OS System). 90 days of such date if it finds such received will be posted without change;
Even if an underwriter were to fail to longer period to be appropriate and the Commission does not edit personal
meet the proposed new timeframes, it publishes its reasons for so finding or identifying information from
would still comply with Rule G–36 if it (ii) as to which the self-regulatory submissions. You should submit only
met the original timeframe of ten organization consents, the Commission information that you wish to make
business days after the sale date, but no will: available publicly. All submissions
later than one business day after receipt A. By order approve such proposed should refer to File Number SR–MSRB–
from the issuer, as provided under Rule rule change, or 2005–13 and should be submitted on or
G–36(b)(i). The original draft B. Institute proceedings to determine before August 15, 2005.
amendments were designed to promote whether the proposed rule change
the availability of official statements in For the Commission, by the Division of
should be disapproved.
Market Regulation, pursuant to delegated
the marketplace in advance of bond authority.20
IV. Solicitation of Comments
closing and to encourage the use of
Interested persons are invited to Jonathan G. Katz,
electronic means for disseminating
submit written data, views, and Secretary.
official statements in a more timely and
efficient manner while at the same time arguments concerning the foregoing, [FR Doc. E5–3944 Filed 7–22–05; 8:45 am]
reducing the incidence of technical rule including whether the proposed rule BILLING CODE 8010–01–P

violations that did not raise investor change is consistent with the Act.
protection concerns. Comments may be submitted by any of
the following methods: SECURITIES AND EXCHANGE
Comments Received. AMS supported COMMISSION
the amendment, stating, ‘‘The idea of Electronic Comments
changing the requirement to define [Release No. 34–52051; File No. SR–NYSE–
• Use the Commission’s Internet 2005–45]
submission no later than five or three comment form (http://www.sec.gov/
days prior to the settlement date as rules/sro.shtml); or Self-Regulatory Organizations; New
timely is appropriate.’’ AMS also • Send an e-mail to rule- York Stock Exchange, Inc.; Notice of
suggested eliminating the existing comments@sec.gov. Please include File Filing of Proposed Rule Change To
timeframe for compliance based on Number SR–MSRB–2005–13 on the Amend NYSE Rule 80A (Index
submission of official statements within subject line. Arbitrage Trading Restrictions) To
10 business days of the sale date. Calculate Limitations on Index
Paper Comments
Bandes stated it was against the rule, Arbitrage Trading Based on the NYSE
while BMA stated that, although it • Send paper comments in triplicate Composite Index, Replacing the
‘‘applauds the MSRB’s efforts to to Jonathan G. Katz, Secretary, Current Usage of the Dow Jones
promote the availability of official Securities and Exchange Commission, Industrial Average
statements in the marketplace,’’ it Station Place, 100 F Street, NE.,
Washington, DC 20549–9303. July 18, 2005.
suggested that the MSRB not amend
All submissions should refer to File Pursuant to Section 19(b)(1) of the
Rule G–36 at this time. BMA stated that
Number SR–MSRB–2005–13. This file Securities Exchange Act of 1934
it is ‘‘concerned that these alternative
number should be included on the (‘‘Act’’),1 and Rule 19b–4 thereunder,2
timeframes will serve to frustrate good
subject line if e-mail is used. To help the notice is hereby given that on June 28,
faith efforts to comply with Rule G–36’’
Commission process and review your 2005, the New York Stock Exchange,
and believed that they would ‘‘cause
comments more efficiently, please use Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with
unnecessary confusion amongst
the Securities and Exchange
dealers.’’ BMA further noted that ‘‘time 19 The MSRB notes, however, that the original Commission (‘‘Commission’’) the
periods between sale and issue dates draft amendments to Rule G–36 would not have proposed rule change as described in
appear to have been decreasing. It is not applied to many such variable rate issues, which Items I, II, and III below, which Items
uncommon to have an issue date be the are often exempt from SEC Rule 15c2–12 and
very day after the sale date, particularly therefore are governed by a different provision of
20 17 CFR 200.30–3(a)(12).
Rule G–36. Instead, the rule proposal would have
for variable rate issues. Therefore the provided some relief for issues having extend 1 15 U.S.C. 78s(b)(1).
use of this proposed alternative settlement periods of other unusual features. 2 17 CFR 240.19b–4.

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Federal Register / Vol. 70, No. 141 / Monday, July 25, 2005 / Notices 42609

have been prepared by the Exchange. April 19, 2005. The NYA represents C. Self-Regulatory Organization’s
The Commission is publishing this 77% of the total market capitalization of Statement on Comments on the
notice to solicit comments on the all publicly traded companies in the Proposed Rule Change Received From
proposed rule change from interested U.S., and 64% of the total market Members, Participants or Others
persons. capitalization of all publicly traded The Exchange has neither solicited
I. Self-Regulatory Organization’s companies worldwide. nor received written comments on the
Statement of the Terms of Substance of NYSE Rule 80A affects index arbitrage proposed rule change.
the Proposed Rule Change orders entered in any component stock III. Date of Effectiveness of the
The proposed rule change seeks to of the S&P 500 traded on the NYSE on Proposed Rule Change and Timing for
amend NYSE Rule 80A (‘‘Index any day that the DJIA experiences a Commission Action
Arbitrage Trading Restrictions’’) to price movement of 2% or more. If the Within 35 days of the date of
calculate limitations on index arbitrage market advances by 2% or more, all publication of this notice in the Federal
trading as provided in the rule based on index arbitrage orders to buy must be Register or within such longer period (i)
the NYSE Composite Index (‘‘NYA’’), stabilizing (buy minus); similarly, if the as the Commission may designate up to
replacing the current usage of the Dow market declines by 2% or more, all 90 days of such date if it finds such
Jones Industrial Average (‘‘DJIA’’). The index arbitrage orders to sell must be longer period to be appropriate and
text of the proposed rule change is stabilizing (sell plus). The stabilizing publishes its reasons for so finding or
available on the NYSE’s Web site requirements are removed if the DJIA (ii) as to which the Exchange consents,
(http://www.NYSE.com), at the NYSE’s moves back to or within 1% of its the Commission will:
principal office, and at the closing value. (A) By order approve the proposed
Commission’s Public Reference Room. rule change, or
The Exchange believes that the NYA
II. Self-Regulatory Organization’s is a better reflection of market activity (B) Institute proceedings to determine
Statement of the Purpose of, and whether the proposed rule change
with respect to the S&P 500 as there is
Statutory Basis for, the Proposed Rule should be disapproved.
a higher correlation between the NYA
Change and the S&P 500 than there is between IV. Solicitation of Comments
In its filing with the Commission, the the DJIA and the S&P 500. In this regard, Interested persons are invited to
Exchange included statements the stocks in the NYA include 86% of submit written data, views, and
concerning the purpose of and basis for the total market capitalization of the arguments concerning the foregoing,
the proposed rule change. The text of companies in the S&P 500. The DJIA including whether the proposed rule
these statements may be examined at represents only 34%. The Exchange also change is consistent with the Act.
the places specified in Item IV below. believes that the NYA will continue to Comments may be submitted by any of
The Exchange has prepared summaries, provide an appropriate measure of the following methods:
set forth in Sections A, B, and C below,
market volatility. A review of the NYSE
of the most significant aspects of such Electronic Comments
Rule 80A collars during 2003 shows that
statements. • Use the Commission’s Internet
the 2% DJIA collar was triggered 28
A. Self-Regulatory Organization’s times. During this same period, using comment form (http://www.sec.gov/
Statement of the Purpose of, and the NYA at 2% as the measure would rules/sro.shtml); or
Statutory Basis for, the Proposed Rule • Send an e-mail to rule-
have resulted in the collar being
Change comments@sec.gov. Please include File
triggered 18 times. In 2004, the NYSE
Number SR–NYSE–2005–45 on the
1. Purpose Rule 80A collars were not triggered at
subject line.
all, while the collar would have been
NYSE Rule 80A provides for Paper Comments
triggered once using the NYA at 2%.
limitations on index arbitrage trading in
any component stock of the S&P 500 2. Statutory Basis • Send paper comments in triplicate
Stock Price Index (‘‘S&P 500’’) on any to Jonathan G. Katz, Secretary,
day that the DJIA3 advances or declines The NYSE believes the basis under Securities and Exchange Commission,
at least 2% 4 from its previous day’s the Act for this proposed rule change is 100 F Street, NE., Washington, DC
closing value. The Exchange is the requirement under Section 6(b)(5)5 20549–9303.
proposing to amend NYSE Rule 80A to that an Exchange have rules that are All submissions should refer to File
base the collars on a 2% movement in designed to promote just and equitable Number SR–NYSE–2005–45. This file
the average closing value of the NYSE principles of trade, to remove number should be included on the
Composite Index. The NYA is impediments to and perfect the subject line if e-mail is used. To help the
designed to measure the performance of mechanism of a free and open market Commission process and review your
all common stocks listed on the and a national market system and, in comments more efficiently, please use
Exchange, including American general, to protect investors and the only one method. The Commission will
depository receipts (‘‘ADRs’’), real estate post all comments on the Commission’s
public interest.
investment trusts (‘‘REITs’’) and Internet Web site (http://www.sec.gov/
tracking stocks. The base value of the B. Self-Regulatory Organization’s rules/sro.shtml). Copies of the
NYA was recalculated on December 31, Statement on Burden on Competition submission, all subsequent
2002 at 5,000. It closed at 7030.74 on amendments, all written statements
The Exchange does not believe that with respect to the proposed rule
3 ‘‘Dow Jones Industrial Average’’ is a service the proposed rule change will impose change that are filed with the
mark of Dow Jones & Company, Inc. any burden on competition that is not Commission, and all written
4 NYSE Rule 80A provides that collars are based
necessary or appropriate in furtherance communications relating to the
on a quarterly calculation of ‘‘two percent value,’’ of the purposes of the Act.
which is 2%, rounded down to the nearest ten
proposed rule change between the
points, of the average closing value of the DJIA for Commission and any person, other than
the last month of the previous calendar quarter. 5 15 U.S.C. 78f(b)(5). those that may be withheld from the

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42610 Federal Register / Vol. 70, No. 141 / Monday, July 25, 2005 / Notices

public in accordance with the grants accelerated approval to the automatically execute against the resting
provisions of 5 U.S.C. 552, will be proposed rule change, as amended. complex order in the CTE. Third, OTP
available for inspection and copying in Holders and OTP Firms will have the
II. Description of the Proposed Rule
the Commission’s Public Reference ability to view orders in the CTE and
Change
Room. Copies of the filing also will be submit orders to trade against those
available for inspection and copying at Complex options orders involve orders.
the principal office of the Exchange. All multiple options transactions that are A complex order in the CTE will be
comments received will be posted executed simultaneously as part of a allocated to market participants in
without change; the Commission does single strategy. The PCX currently accordance with the allocation
not edit personal identifying routes complex orders to the Electronic procedures described in PCX Rule
information from submissions. You Order Capture System (‘‘EOC’’), which 6.76(b). In addition, PCX Rule 6.76(c),
should submit only information that is a function of the Floor Broker Hand which deals with crossing orders on
you wish to make available publicly. All Held System. Orders on the trading floor PCX Plus, will apply to orders in the
submissions should refer to File are announced by a Floor Broker to the CTE.10
Number SR–NYSE–2005–45 and should trading crowd and trade in open outcry.
Complex orders resting in the CTE
be submitted on or before August 15, As an enhancement to the PCX Plus
may be executed without consideration
2005. system, the Exchange intends to develop
to the prices of the same complex orders
a CTE, which will facilitate more
For the Commission, by the Division of that might be available on other
automated handling of complex orders.
Market Regulation, pursuant to delegated
Additionally, the Exchange proposes to exchanges.11 Orders of public customers
authority.6
adopt a separate complex order rule in the CTE will have priority over orders
Jill M. Peterson, applicable solely to the PCX Plus from non-public customers, and
Assistant Secretary. system.5 multiple public customer complex
[FR Doc. E5–3947 Filed 7–22–05; 8:45 am] Complex Orders on PCX Plus will orders at the same price will be
BILLING CODE 8010–01–P route either to the EOC or the CTE, as accorded priority based on time.12
determined by the Exchange.6 Orders PCX Rule 6.75(e) and PCX Rule 6.75,
from public customers and registered Commentary .04 generally allow a
SECURITIES AND EXCHANGE broker-dealers are eligible to be routed member holding a complex order to
COMMISSION to the CTE.7 The PCX will announce trade ahead of the book on one leg of the
routing decisions to OTP Holders and order, provided that the other leg of the
Release No. 34–52060; File No. SR–PCX– OTP Firms via Regulatory Bulletin.8 order betters the corresponding bid
2005–71] When a complex order routes to the (offer) in the consolidated order book.
EOC, the Floor Broker will announce These rules will continue to apply to the
Self-Regulatory Organizations; Pacific the order to the trading crowd, which trading of complex orders.
Exchange, Inc.; Order Granting may trade with the order at its limit III. Discussion
Accelerated Approval to a Proposed price or offer price improvement. If the
Rule Change and Amendment No. 1 trading crowd chooses not to trade with The Commission has carefully
Relating to Complex Orders on the the order, the order will reside on the reviewed the proposed rule change and
PCX Plus System EOC or be entered into the CTE, at the finds that the proposed rule change, as
Floor Broker’s discretion. Any complex amended, is consistent with the
July 19, 2005. order represented by a Floor Broker will requirements of the Act and the rules
I. Introduction be subject to PCX Rule 6.46(a).9 and regulations thereunder applicable to
When an order is routed directly into a national securities exchange.13 In
On June 7, 2005, the Pacific Exchange, the CTE, the order may trade in one of particular, the Commission finds that
Inc. (‘‘PCX’’) filed with the Securities three ways. First, if individual orders or the proposed rule change, as amended,
and Exchange Commission quotes in the Exchange’s consolidated is consistent with Section 6(b)(5) of the
(‘‘Commission’’), pursuant to Section book ‘‘line-up’’ against the legs of the Act,14 which requires, among other
19(b)(1) of the Securities Exchange Act complex order, an automatic execution things, that the rules of a national
of 1934 (‘‘Act’’) 1 and Rule 19b–4 occurs, provided the complex order can securities exchange be designed to
thereunder,2 a proposed rule to create a be executed in full (or in a permissible promote just and equitable principles of
Complex Trading Engine (‘‘CTE’’) to ratio) by the orders in the consolidated trade, to remove impediments to and
facilitate more automated handling of book. Second, if a subsequent incoming perfect the mechanism of a free and
complex options orders. On June 14, complex order is marketable against a
2005, the PCX submitted Amendment resting complex order in the CTE, it will 10 PCX Rule 6.76(c) prohibits an order entry firm

No. 1 to the proposed rule change.3 The from executing as principal against an order it
proposed rule change and Amendment
5 The following types of complex orders, as represent as agent unless: (1) The agency order is
defined in PCX Rule 6.91(a), will be eligible for first exposed on the Exchange for at least 30
No. 1 were published for comment in routing to the CTE: Spread orders; straddle orders; seconds; (2) the PCX Broker utilizes the Crossing
the Federal Register on June 27, 2005.4 strangle orders; combination orders; ratio orders; Mechanism pursuant to PCX Rule 6.76(c)(2); or (3)
The Commission received no comments butterfly spread orders; box/roll spread orders; and the PCX Broker executes the orders pursuant to PCX
regarding the proposal. This order collar orders and risk reversals. Only complex Rule 6.47.
orders with no more than four legs are eligible for 11 See PCX Rule 6.91(c)(2). The Options Price
the CTE. See PCX Rule 6.91(c)(4). Conversions and Reporting Authority does not disseminate complex
6 17 CFR 200.30–3(a)(12). reversals will not be eligible for routing to the CTE. order prices. This provision of the PCX’s proposal
1 15 U.S.C. 78s(b)(1). See PCX Rule 6.91, Commentary .01. is similar to International Securities Exchange Rule
2 17 CFR 240.19b–4. 6 See PCX Rule 6.91(c)(1). 722(b)(3) and CBOE Rule 6.53C(c)(iii).
3 In Amendment No. 1, the PCX revised Exhibit 7 Id. 12 See PCX Rule 6.76(a)(A).

5 to the proposal to add underscoring that was 8 Id. 13 In approving this proposal, the Commission has

inadvertently deleted from the text of proposed PCX 9 PCX Rule 6.46(a) requires a Floor Broker considered the proposed rule’s impact on
Rule 6.91(b). handling an order to use due diligence to execute efficiency, competition, and capital formation. 15
4 See Securities Exchange Act Release No. 51885 the order at the best price or prices available to him, U.S.C. 78c(f).
(June 20, 2005), 70 FR 36995. in accordance with the rules of the PCX. 14 15 U.S.C. 78f(b)(5).

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