Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices 39455

11 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).

4The Exchange will file additional

decimalization-related rule changes within the time

frame required by the Commission’s recent order.

See Securities Exchange Act Release No. 42914

(June 8, 2000), 65 FR 38010 (June 19, 2000). This

proposed rule change has been submitted first to

ensure that member firms receive appropriate

notice of the contemplated testing requirements.

5Point-to-point tests are conducted between a

member’s system (or the systems of the member’s

service provider) and the Exchange’s systems.

Industry-wide testing involves a wide variety of

industry participants, including national securities

exchange, registered clearing corporations and

broker-dealers. The Exchange currently intends to

require each of its active members (or their service

providers) to participate in point-to-point test, and

may require certain members to participate in

industry-wide testing.

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

7 15 U.S.C. 78f(b)(5).

8 15 U.S.C. 78s(b)(3)(A)(iii).

9 17 CFR 240.19b–4(f)(3).

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–Ame–00–32 and should

be submitted by July 17, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.11

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–16028 Filed 6–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42959; File No. SR–CHX–

00–21]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

Chicago Stock Exchange,

Incorporated, Amending Its Rules To

Mandate Decimal Price Testing

June 20, 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 June 14,

2000, the Chicago Stock Exchange,

Incorporated (‘‘CHX’’ 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 CHX. The

CHX has designated this proposal as one

concerned solely with the

administration of the CHX 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 Exchange proposes to add a new

rule (Article XI, Rule 12) to require

Exchange members to participate in

such decimalization-related testing as

the Exchange may mandate and to

maintain documentation of that testing.

The text of the proposed rule change is

available upon request from the CHX or

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

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

Although the starting dates and

specific details of an industry-wide

implementation plan have not yet been

finalized, national securities exchanges

and other market participants have

begun testing the systems involved in

the conversion to decimal-based trading.

The CHX, in cooperation with the

Commission, the Securities Industry

Association, and other self-regulatory

organizations, has been participating in

this important testing effort. The

proposed rule described in this filing

requires CHX member firms to

participate in such decimalizationrelated testing as the Exchange may

require and to maintain documentation,

including the results, of that testing.4

Specifically, the proposed new rule

requires CHX members to participate in

any point-to-point and industry-wide

computer testing that the Exchange may

require.5 It also requires members to

prepare and submit such reports relating

required testing as the Exchange may

request, and to retain other testingrelated documentation for inspection by

the Exchange.

These requirements are similar to

those that the Exchange imposed in

1999 as part of its Year 2000 testing

effort, and are similar to those currently

being proposed by at least one other

national securities exchange. This

proposed new rule shall expire upon the

full implementation of decimal pricing.

2. Statutory Basis

The CHX believes the proposed rule

is consistent with the requirements of

the Act and the rules and regulations

thereunder governing national securities

exchanges, and, in particular, with the

requirements of Section 6(b) of the Act.6

Specifically, the CHX believes the

proposed rule is consistent with Section

6(b)(5) of the Act 7 in that it is designed

to promote just and equitable principles

of trade, to remove impediments to and

perfect the mechanism of a free and

open market and a national market

system, and, in general, to protect

investors and the public interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange 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.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

Written comments were neither

solicited nor received with respect 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 Exchange, it has

become effective pursuant to Section

19(b)(3)(A)(iii) of the Act 8 and

subparagraph (f)(3) of Rule 19b–4

thereunder.9 At any time within 60 days

of the filing of such proposed rule

39456 Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices

10 17 CFR 200.30–3(a)(12).

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

2The Commission has modified the text of the

summaries prepared by MBSCC.

3Article I, Rule 1 of MBSCC’s rules will be

amended as follows. ‘‘The term an ‘Affiliate’ of, or

a person ‘Affiliated’ with, a specified person, means

a person that directly, or indirectly, through one or

more intermediaries, controls, or is controlled by,

or is under common control with, the person

specified. For purposes of this definition, the term

‘control’ (including the terms ‘controls,’ ‘controlled

by,’ and ‘under common control with’) means the

possession, direct or indirect, of the power to direct

or cause the direction of the management and

policies of a person, whether through the

ownership of voting securities, by contract, or

otherwise.’’

4 15 U.S.C. 78q–1(b)(3)(A).

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

purpose 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 nay 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–CHX–00–21 and should

be submitted by July 17, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.10

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–16027 Filed 6–23–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42961; File No. SR–

MBSCC–00–01]

Self-Regulatory Organizations; MBS

Clearing Corporation; Notice of Filing

of Proposed Rule Change Relating to

Letters of Credit

June 20, 2000.

Pursuant to Section 19(b) 1 of the

Securities Exchange Act of 1934

(‘‘Act’’), notice is hereby given that on

April 11, 2000, the MBS Clearing

Corporation (‘‘MBSCC’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’) and on June 13, 2000,

amended the proposed rule change as

described in Items I, II, and III below,

which Items have been prepared

primarily by MBSCC. 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 proposed rule change will

prohibit MBSCC from accepting a letter

of credit from a participant when the

participant or an affiliate of that

participant issues the letter of credit.

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

MBSCC 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. MBSCC has prepared

summaries, set forth in sections (A), (B),

and (C) below, of the most significant

aspects of such statements.2

(A) Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

The purpose of the proposed rule

change is to modify Article IV, Rule 2,

Section 9 of MBSCC’s rules, which

governs deposits of letters of credit by

participants to the participants fund for

margin purposes. This rule provides

that MBSCC may approve as the issuer

of a letter of credit any domestic or

foreign bank or trust company meeting

the requirements set forth in procedures

adopted from time to time by MBSCC.

The proposed rule change will amend

Article IV, Rule 2, Section 9 by adding

a new subsection (b) which will prohibit

MBSCC from accepting a letter of credit

from a participant that is issued by that

participant or by an affiliate of that

participant.3 The proposed rule change

will codify MBSCC’s historical practice

of requiring that a letter of credit

deposited by a participant to the

participants fund be issued by an

approved letter of credit issuer other

than the participant or an affiliate of the

participant.

The proposed rule change also makes

a technical modification to Article III,

Rule 5 of MBSCC’s rules to correct the

reference contained within such rule

from ‘‘Rule 4’’ to ‘‘Rule 5.’’

MBSCC believes that the proposed

rule change is consistent with the

requirements of Section 17A(b)(3)(A) 4

of the Act and the rules and regulations

thereunder because it is designed to

assure the safeguarding of securities and

funds that are in the custody or control

of MBSCC or for which it is responsible.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

MBSCC does not believe that the

proposed rule change will have an

impact on or impose a burden on

competition.

(C) Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

No written comments relating to the

proposed rule change have been

solicited or received. MBSCC will notify

the Commission of any written

comments received by MBSCC.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within thirty-five 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

ninety 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,

including whether the proposed rule

change is consistent with the Act.

Persons making written submissions

should file six copies thereof with the