Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Notices 38617

14As discussed above, the revision of Amex Rule

18 eliminates requirements for Amex issuers that

were imposed by Amex Rule 18. Issuers wanting to

voluntarily delist would still be required to comply

with Section 12 of the Act, which provides notice

and an opportunity for public comment. See supra

note 6.

15 15 U.S.C. 78f(b)(5).

16 15 U.S.C. 78s(b)(2).

17 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(iii).

4A member that has its electronic interface with

the Exchange through a service provider may be

exempted from this requirement if such service

provider conducts successful tests with the

Exchange on behalf of the firms its services, if the

member conducts successful point-to-point testing

with the service provider by a time to be designated

by the Exchange, and if the Exchange agrees that no

further testing is necessary.

notice to the Amex that it wants to

delist provided that it has followed all

applicable state laws in effect in the

state in which it is incorporated should

ensure compliance with investor

protections codified in relevant state

statutes while still significantly

streamlining the delisting process on the

Amex.14 As a result, because the

proposed amendments to Amex Rule 18

ease the existing restrictions on Amexlisted companies that wish to

voluntarily delist their securities from

the Exchange while continuing to

ensure compliance with applicable state

laws, the Commission believes that the

Amex’s proposed revisions to Amex

Rule 18, as amended, are consistent

with the requirements of Section 6(b)(5)

of the Act 15 that requires the rules of

the Exchange to further the protection of

investors and public interest.

IV. Conclusion

It is therefore ordered, pursuant to

Section 19(b)(2) of the Act,16 that the

proposed rule change (SR–Amex–99–

30), including amendments Nos. 1 and

2, is approved.

By the Commission, for the Division of

Market Regulation, pursuant to delegated

authority.17

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–15619 Filed 6–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42943; File No. SR–CBOE–

00–20]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Board Options Exchange,

Incorporated, Amending Its Rules to

Mandate Decimal Pricing Testing

June 14, 2000.

Pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’),1 and Rule 19b–4 thereunder,2

notice is hereby given that on May 24,

2000, the Chicago Board Options

Exchange, Incorporated (‘‘CBOE’’ 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 CBOE. The CBOE has

designated this proposal as one

concerned solely with the

administration of the CBOE under

Section 19(b)(3)(A)(iii) of the Act,3

which renders the proposal effective

upon filing with the Commission. The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CBOE proposed to amend its

rules to mandate that member firms test

computer systems in order to ensure

preparedness for the industry’s

conversion to decimal pricing.

The text of the proposed rule change

is available upon request from the CBOE

or the Commission.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filling with the Commission, the

Exchange included statements

concerning the purpose of and basis for

the proposed rule change and discussed

any comments it received regarding the

proposed rule change. The text of these

statements may be examined at the

places specified in Item IV below. The

Exchange 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

1. Purpose

As the securities industry prepares for

the conversion to decimal pricing, it

will be necessary for various

constituents of the securities industry to

test their computer systems in order to

avoid widespread problems. The CBOE,

in cooperation with the Commission

and other self-regulatory organizations,

has been working toward a successful

transition to decimal pricing. The

purpose of the proposed rule change is

to require CBOE member firms to

participate in tests of computer systems

designed to prepare for the industry’s

conversion to decimal pricing.

The proposed rule change would

create new CBOE Rule 15.12 to require

CBOE members to participate in the

testing of computer systems in a manner

and frequency to be prescribed by the

Exchange. It is the CBOE’s

understanding that other self-regulatory

organizations, including the National

Association of Securities Dealers, Inc.,

the New York Stock Exchange, Inc., and

the American Stock Exchange LLC, are

also proposing rule changes to require

testing by their members in connection

with the industry’s conversion to

decimal pricing.

The Securities Industry Association

has undertaken to coordinate industrywide computer testing to ensure that the

securities industry is adequately

prepared to convert to decimal pricing.

Industry constituents to participate in

the testing will include, among others,

national securities exchanges, registered

clearing corporations, data processors,

and broker-dealers. Several industrywide tests have been planned, the first

of which took place in April 2000.

The CBOE will employ its new Rule

15.12 to require that its members

participate in these tests. CBOE Rule

15.12 further provides that any firm

having an electronic interface with the

Exchange would be required to conduct

point-to-point testing with the

Exchange. Point-to-point testing refers

to tests conducted between two entities,

in this case a member having an

electronic interface and the Exchange.4

Under the proposal, the Exchange

would require member firms to

participate in industry-wide testing to

the extent such firms can be

accommodated by the testing schedule.

The Exchange would exercise its

authority under CBOE Rule 15.12 to the

extent it deems that the participation of

particular members in the testing is

important, and to the extent those

members would otherwise not

voluntarily choose to participate.

The proposed rule change would also

allow the CBOE to require members to

file reports with the CBOE concerning

the required tests in the manner and

frequency determined by the Exchange.

A member subject to CBOE Rule 15.12

who failed to participate in the

manadatory tests or who failed to file

any required reports, would be subject

to disciplinary action pursuant to

Chapter XVII of the Exchange’s rules.

The Exchange believes that it

currently has the authority, without the

38618 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Notices

5 15 U.S.C. 78f(b).

6 15 U.S.C. 78f(b)(5).

7 15 U.S.C. 78s(b)(3)(A)(iii).

8 17 CFR 240.19b–4(f)(3).

9 17 CFR 200.30–3(a)(12).

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

approval of CBOE Rule 15.12, to require

testing and reporting with respect to the

implementation of decimal pricing

under the broad authority granted it to

enforce the provisions of the Act and to

ensure the safety of its marketplace.

More specifically, CBOE Rule 4.2

prohibits members from engaging in

conduct that violates the Act or rules

and regulations thereunder; CBOE Rule

4.3 provides the Exchange authority to

approve the maintenance of any wire

connections between its members and

other members or non-members; and

CBOE Rule 4.10 gives the President or

the Chairman of the Exchange the right

to impose such conditions and

restrictions on a member as either may

consider reasonably necessary for the

protection of the Exchange and the

customers of such member.

Notwithstanding this existing authority,

however, the Exchange believes that its

membership would be better served by

having its specific intentions with

respect to mandatory decimal pricing

testing defined in a stand-alone rule.

The proposed CBOE Rule 15.12

would expire automatically upon the

completion of decimal pricing

implementation.

2. Statutory Basis

The CBOE believes proposed CBOE

Rule 15.12, whose purpose is to ensure

the participation of Exchange members

in important testing prior to the

securities industry’s conversion to

decimal pricing, is consistent with

Section 6(b) of the Act 5 in general and

further the objectives of Section 6(b)(5) 6

in particular in that it is designed to

promote just and equitable principles of

trade and to protect investors and the

public interest.

C. Self-Regulatory Organization’s

Statement on Burden on Competition

The CBOE does not believe that the

proposed rule change will impose any

burden on competition not necessary or

appropriate in furtherance of the

purposes of the Act.

Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

No written comments were solicited

or received to the proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Because the foregoing rule change is

concerned solely with the

administration of the Exchange, it has

become effective pursuant to Section

19(b)(3)(A)(iii) of the Act 7and

subparagraph (f)((3) of Rule 19b–4

thereunder.8 At any time within 60 days

of the filing of such proposed rule

change, the Commission may summarily

abrogate such rule change if it appears

to the Commission that such action is

necessary or appropriate in the public

interest, for the protection of investors,

or otherwise in furtherance of the

purposes of the Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views and

arguments concerning the foregoing,

including whether the proposed rule

change is consistent with the Act.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW,

Washington, DC 20549–0609. 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

Room, 450 Fifth Street, NW,

Washington, DC. Copies of such filing

will also be available for inspection and

copying at the principal office of the

Exchange. All submissions should refer

to File No. SR–CBOE–00–20 and should

be submittted by July 12, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.9

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–15614 Filed 6–20–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42930; File No. SR–CBO–

99–51]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Chicago Board Options Exchange,

Inc. to Increase the Maximum Order

Size Eligible for Automatic Execution

Pursuant to section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on

September 1, 1999, the Chicago Board

Options Exchange, Inc. (‘‘CBOE’’ or

‘‘Exchange’’) filed with the Securities

and Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) the proposed rule

change as described in Items I, II, and

III below, which Items have been

prepared by the CBOE. The Commission

is publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The CBOE proposes to amend its rules

governing the operation of its Retail

Automatic Execution System (‘‘RAES’’)

to increase the maximum size of orders

eligible for execution on RAES, and

make conforming changes to CBOE’s

firm quote rule and Interpretation .03

thereunder. The text of the proposed

rule change is available at the Office of

the Secretary, CBOE and at the

Commission.

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

CBOE 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 CBOE 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

1. Purpose

The principal purpose of the

proposed rule change is to increase from

fifty contracts to seventy-five contracts