# Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto by the New York Stock Exchange, Inc. Relating to a Proposed Extension of the Trading Halt Provisions of Rule 80B > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A94-25480 ## Record - **Collection:** Federal Register - **Document type:** Uncategorized Document - **Published:** October 14, 1994 ## Text SECURITIES AND EXCHANGE COMMISSION [Release No. 34-34799 ; File No. SR-NYSE-94-33] Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto by the New York Stock Exchange, Inc. Relating to a Proposed Extension of the Trading Halt Provisions of Rule 80B October 6, 1994. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\ notice is hereby given that on September 22, 1994, the New York Stock Exchange, Inc. (``NYSE'' or ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the self-regulatory organization. On September 30, 1994, the Exchange filed Amendment No. 1 to the proposed rule change.\2\ The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\15 U.S.C. 78s(b)(1). \2\In Amendment No. 1, the NYSE requests that the Commission find good cause for accelerating approval of its proposal pursuant to Section 19(b)(2) of the Act to allow approval of its proposal prior to the October 31, 1994 expiration of the Rule 80B temporary approval. In addition, Amendment No. 1 corrects a typographical error appearing in Section I of Exhibit 1 to the filing by replacing 1994 with 1995. See letter from Brian M. McNamara, Vice President, Market Surveillance, NYSE, to Sharon Lawson, Assistant Director, Division of Market Regulation, Commission, dated September 29, 1994 (``Amendment No. 1''). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to extend the effectiveness of the ``circuit breaker'' provisions of Exchange Rule 80B until October 31, 1995. II. Self-Regulatory Organization's Statement of the Purpose Of, and Statutory Basis For, the Proposed Rule Change In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in Sections (A), (B) and (C) below, of the most significant aspects of such statements. (A) Self-Regulatory Organization's Statement of the Purpose Of, and Statutory Basis For, the Proposed Rule Change Rule 80B provides, in part, that if the Dow Jones Industrial Average (``DJIA'') falls 250 or more points below its previous trading day's closing value, trading in all stocks on the Exchange will halt for one hour. It further provides that if on the same day the DJIA drops 400 or more points from its previous trading day's close, trading on the Exchange will halt for two hours. Rule 80B was enacted in response to studies of the October 1987 Market Break. Following the Market Break, numerous market analyses and reports were undertaken. One such report was the Interim Report of the Working Group on Financial Markets (``Working Group'') issued in May 1988 by the Undersecretary for Finance of the Department of the Treasury, and the Chairmen of the Commission, the Commodity Futures Trading Commission and the Board of Governors of the Federal Reserve System. The Working Group recommended ``coordinated trading halts and reopenings for large, rapid market declines that threaten to create panic conditions.'' The Working Group specifically recommended, and the Exchange endorsed, temporary halts in the trading of all stocks, stock options, and stock index options as well as the trading of stock index futures and options on stock index futures when the DJIA reaches certain trigger values. The Presidential Task Force on Market Mechanisms, (``Brady Commission''), also endorsed the concept of coordinated market trading halts. Rule 80B was approved by the Commission on a pilot basis on October 19, 1988, and has been extended for another year every October since then. This pilot is due to expire on October 31, 1994. Since the original adoption of the rule in 1988, the provisions of Rule 80B have not been triggered. The Exchange continues to believe that coordinated trading halts and reopenings during large, rapid market declines is a viable concept, and is therefore seeking to extend the effectiveness of Rule 80B for another year, until October 31, 1995. The Exchange adopted Rule 80B with the understanding that all United States stock exchanges and the National Association of Securities Dealers would adopt rules or procedures substantively identical to Rule 80B with respect to the trading of stocks, stock options and stock index options, and that the Chicago Board of Trade, the Chicago Mercantile Exchange, the Kansas City Board of Trade and the New York Futures Exchange would adopt rules halting the trading of stock index futures and options on such futures contracts under circumstances substantively identical to those contained in Rule 80B. The Exchange is seeking the extension of the effectiveness of Rule 80B with the understanding that the market centers referred to above will similarly extend the effectiveness of their respective rules which are substantively identical to Rule 80B. The Exchange believes that its proposal is consistent with the requirement of Section 6(b)(5) of the Act that an Exchange have rules that are designed to promote just and equitable principals of trade, remove impediments to, and perfect the mechanism of, a free and open market, and in general protect investors and the public interest. The Exchange believes that extending the effectiveness of Rule 80B for an additional year is consistent with these objectives in that a trading halt requirement during a period of significant stress can be expected to provide market participants with a reasonable opportunity to become aware of and respond to significant price movements, thereby facilitating, in an orderly manner, the maintenance of an equilibrium between buying and selling interest. (B) Self-Regulatory Organization's Statement on Burden on Competition The NYSE believes that the proposed rule change will not impose any 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 The Exchange requests that the Commission find good cause for approving its proposal prior to the thirtieth day after publication in the Federal Register to allow for the uninterrupted effectiveness of Exchange Rule 80B which otherwise expires on October 31, 1994. Within 35 days of the date of publication of this notice in the Federal Register or within such longer 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 such 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 in the Commission's Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. Copies of such filing will also be available for inspection and copying at the principal office of the above-mentioned self-regulatory organization. All submissions should refer to File No. SR-NYSE-94-33 and should be submitted by November 4, 1994. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\3\ --------------------------------------------------------------------------- \3\17 CFR 200.30-3(a)(12) (1993). --------------------------------------------------------------------------- Margaret H. McFarland, Deputy Secretary. [FR Doc. 94-25480 Filed 10-13-94; 8:45 am] BILLING CODE 8010-01-M --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-25480. Public record. Not legal advice.