FOR IMMEDIATE RELEASE 99-16 Commission Approves Changes to NYSE Rule 80A ("Collar Rule") Washington, D.C., February 11, 1999 -- The Commission approved a proposed rule change submitted under Rule 19b-4 by the New York Stock Exchange, Inc. (SR-NYSE-98-45) relating to limits on program trading. The rule change eliminates the "sidecar" provisions of NYSE Rule 80A which temporarily divert program trading orders if the primary S&P 500 futures contract declines by 12 points from its previous close. The rule change also widens the trigger levels for the "collar" provisions of Rule 80A which limit index arbitrage trading. The current triggers restrict index arbitrage if the Dow Jones Industrial Average moves up or down 50 points from its previous close; the collar restrictions are removed if the DJIA moves back to or within 25 points of its previous close. The rule change replaces the 50-point and 25-point triggers with thresholds set at a "two-percent value" and "one-percent value" of the DJIA. These percent values would be translated into specific point levels at the beginning of each calendar quarter based on an average closing value over the preceding month. The NYSE proposal also contains supplementary material for Rule 80A that seeks to clarify the definition of "index arbitrage" under the Rule. While the Commission has approved the NYSE rule proposal, viewing the elimination of the sidecar provisions and the widening of the collar trigger levels as significant improvements over current limitations on intermarket trading, the Commission urges the NYSE to carefully evaluate the continuing need for Rule 80A's restrictions on index arbitrage. For further information concerning the Commission's approval of the rule-change proposal, contact John Heine at (202) 942-0020. # # #