[15224]
October 2, 2002
TO: EQUITY MARKETS ADVISORY COMMITTEE No. 25-02
RE: NYSE PROPOSED RULE CHANGE AMENDING NYSE DIRECT+
The Securities and Exchange Commission has issued a notice of the filing of a proposed
rule change filed by the NYSE1 (a copy of which is attached) amending NYSE Direct+. As you
know, NYSE Direct+ provides for the automatic execution of limit orders in a stock against
trading interest reflected in the Exchange’s published quotation. Currently, order size eligibility
for all auto-ex orders for stocks is 1,099 shares or less. The NYSE is proposing a one-year pilot
program to expand the size of orders eligible for automatic execution under NYSE Direct+ to a
maximum of 10,000 shares for two Exchange products – “Investment Company Units” (which
include ETFs) and “Trust Issued Receipts” (which include HOLDRs). The Release states that
the expanded order size would be phased in under the pilot program, with order size raised on
a gradual basis to the maximum of 10,000 shares as experience is gained. The NYSE believes
that the increase in the number of shares eligible for automatic execution for these securities will
serve to attract additional order flow to NYSE Direct+.
Ari Burstein
Associate Counsel
Attachment (in .pdf format)
1 Securities Exchange Act Release No. 46527 (September 20, 2002), 67 FR 61368 (September 30, 2002) (“Release”).
Comments on the proposed rule change are due to the SEC no later than October 21, 2002.