39454 Federal Register / Vol. 65, No. 123 / Monday, June 26, 2000 / Notices

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

2 17 CFR 240.19b–4.

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

4Securities Exchange Act Release No. 42360 (Jan.

28, 2000), 65 FR 5003 (Feb. 2, 2000).

5Securities Exchange Act Release No. 42685

(Apr. 13, 2000), 65 FR 21046 (Apr. 19, 2000).

6Securities Exchange Act Release No. 42914

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

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

8 15 U.S.C. 78f(b)(5).

9 15 U.S.C. 78s(b)(3)(A)(iii).

10 17 CFR 240.19b–4(f)(3).

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42957; File No. SR–Amex–

00–32]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

American Stock Exchange LLC

Amending Its Rules To Mandate

Decimal Pricing Testing

June 19, 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 12,

2000, the American Stock Exchange LLC

(‘‘Amex’’ 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 Exchange. The Amex

has designated this proposal as one

concerned solely with the

administration of the Exchange 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 adopt

Amex Rule 431 relating to mandatory

decimal pricing testing. In addition, the

Exchange proposes to rescind Rule 430

(Mandatory Participation in Year 2000

Testing).

The text of the proposed rule change

is available upon request from the Amex

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

On January 28, 2000, the Commission

issued an order (‘‘January 28 Order’’)

directing the securities markets to begin

phasing in decimal pricing by July 3,

2000.4 The Commission subsequently

suspended all deadlines set forth in the

January 28 Order and stated its

intention to issue a new order for the

implementation schedule of decimal

pricing.5 On June 8, 2000, the

Commission issued an order (‘‘June 8

Order’’) directing the securities markets

to begin phasing in decimal pricing no

later than September 5, 2000.6

Proposed Amex Rule 431 requires

members and member organizations to

conduct or participate in decimal

pricing testing in order to facilitate

compliance with the Commission’s June

8 Order, as well as with any subsequent

Commission directives relating to

implementation of decimal pricing.

Proposed Amex Rule 431 requires

members and member organizations to

participate in or conduct, in a manner

and frequency to be prescribed by the

Exchange, testing of their computer

systems to ascertain the compatibility of

those systems with decimal pricing.

In addition, the proposed rule

requires members and member

organizations to provide such reports

about the required tests as the Exchange

may prescribe. Members and member

organizations will be responsible for

maintaining adequate documentation of

any testing required by this rule, as well

as the results of such testing, for

examination by the Exchange. Members

and member organizations subject to the

rule who fail to test as required or to file

any required reports would be subject to

disciplinary action by the Exchange.

The Exchange also proposes to

rescind Amex Rule 430 relating to

mandatory Year 2000 testing because

such testing has been completed and the

rule is no longer necessary.

2. Statutory Basis

The Exchange believes proposed

Amex Rule 431, 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 7 in general and

furthers the objectives of Section

6(b)(5)8 in particular in that it is

designed to prevent fraudulent and

manipulative acts and practices, 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; and in

that it is not designed to permit unfair

discrimination between customers,

issuers, brokers and dealers.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Amex 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

No written comments were solicited

or 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 the Exchange, it has

become effective pursuant to Section

19(b)(3)(A)(iii) of the Act 9 and

subparagraph (f)(3) of Rule 19b–4

thereunder.10 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

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