64468 Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Notices

117 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)(i).

4 17 CFR 240.19b–4(f)(1).

5Securities Exchange Act Release No. 41208

(March 24, 1999), 64 FR 15386 (March 31, 1999).

6Securities Exchange Act Release No. 41606 (July

8, 1999), 64 FR 38226 (July 15, 1999).

7Securities Exchange Act Release No. 43303

(September 19, 2000), 65 FR 57853 (September 26,

2000).

8Securities Exchange Act Release No. 41731

(August 11, 1999), 64 FR 44983 (August 18, 1999).

9Securities Exchange Act Release No. 41974

(October 4, 1999), 64 FR 55508 (October 13, 1999).

10Securities Exchange Act Release No. 41494

(March 3, 2000), 65 FR 13069 (March 10, 2000).

11Securities Exchange Act Release No. 43103

(August 1, 2000), 65 FR 48774 (August 9, 2000).

12See footnotes 5 and 6, supra.

13Securities Exchange Act Release No. 41208

(March 24, 1999), 64 FR 15386 (March 31, 1999) at

footnote 15.

14See footnote 8, supra.

the Act to impose such an

anticompetitive burden upon it.

C. Self-Regulatory Organziation’s

Statement on Comments on the

Proposed Rule Change Received From

Members, Participants, or Others

The Exchange has not solicited, and

does not intend to solicit, comments on

this proposed rule change. The

Exchange has not received any

unsolicited written comments from

members or other interested parties.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

Within 35 days of the date of

publication of this notice in the Federal

Register (or within such longer period

as the Commission may designate up to

90 days of such date if it finds such

longer period to be appropriate and

publishes its reasons for so finding, or

as to which the ISE consents), the

Commission shall by order approve this

proposed rule change or 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

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. Copies of the filing will also be

available for inspection and copying at

the principal office of the ISE. All

submissions should refer to File No.

SR–ISE–00–10 and should be submitted

by November 17, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.1

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–27651 Filed 10–26–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43469; File No. SR–NASD–

00–60]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. To Delay the

Implementation Date of Changes to

Riskless Principal Trade Reporting

Rules

October 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 October

18, 2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’),

through its wholly owned subsidiary,

The Nasdaq Stock Markets, Inc.

(‘‘Nasdaq’’), filed with the Securities

and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Item I, II,

and III below, which Items have been

prepared by Nasdaq. Nasdaq filed the

proposal pursuant to Section

19(b)(3)(A)(i) of the Act,3 and Rule 19b–

4(f)(1) 4 thereunder, 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

Nasdaq proposes to delay until

February 1, 2001, the implementation

date of the riskless principal trade

reporting rule changes announced in

SR–NASD–98–59,5 SR–NASD–98–08,6

SR–NASD–00–52,7 and the

interpretations thereto filed in SR–

NASD–99–39,8 SR–NASD–99–52,9 SR–

NASD–00–06,10 and SR–NASD–00–

44.11

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

Nasdaq included statements concerning

the purpose of and basis for its proposal

and discussed any comments it received

regarding the proposal. The text of these

statements may be examined at the

places specified in Item IV below.

Nasdaq 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

On March 24, 1999 and July 8, 1999,

the Commission approved proposals to

amend the NASD trade reporting rules

relating to riskless principal

transactions in Nasdaq National Market,

Nasdaq SmallCap Market, Nasdaq

convertible debt, and non-Nasdaq overthe-counter (‘‘OTC’’) equity securities,

and exchange-listed securities traded in

the Nasdaq InterMarket (‘‘Riskless

Principal Trade Reporting Rules’’).12

Under the new Riskless Principal Trade

Reporting Rules, a ‘‘riskless’’ principal

transaction is one where an NASD

member, after having received an order

to buy (sell) a security, purchases (sells)

the security as principal at the same

price to satisfy the order to buy (sell).

The Rules require a firm to report a

riskless principal trade as one

transaction.

In the Order approving SR–NASD–

98–59, the Commission asked Nasdaq to

submit an interpretation providing

examples of how mark-ups, markdowns, and other fees would be

excluded for purposes of the amended

riskless principal rules.13 As requested,

on August 5, 1999, Nasdaq filed with

the Commission SR–NASD–99–39,14

attached to which was Notice to

Members 99–65, which gave examples

of how mark-ups and other fees will be

Federal Register / Vol. 65, No. 209 / Friday, October 27, 2000 / Notices 64469

15 Id.

16See footnote 9, supra.

17See letter to Belinda Blaine, Associate Director,

SEC, dated February 18, 2000 from Automated

Securities Clearance, Ltd. and the following NASD

member firms: Bernard L. Madoff Securities; CIBC

World Markets; Credit Suisse First Boston;

Deutsche Banc Alex. Brown; Donaldson, Lufkin &

Jenrette; Goldman Sachs & Co.; Jeffries & Company,

Inc.; Lehman Bros.; Merrill Lynch, Pierce, Fenner

& Smith, Inc.; Morgan Stanley Dean Witter; and

Salomon Smith Barney Inc.

18See footnotes 10 and 11, supra.

19 15 U.S.C. 78o–3(b)(6).

20 15 U.S.C. 78s(b)(3)(A)(i).

21 17 CFR 240.19b–4(f)(1).

22 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b-4.

excluded for purposes of the Riskless

Principal Trade Reporting Rules. SR–

NASD–99–39 15 and Notice to Members

99–65 were filed as an interpretation to

NASD Rules 4632, 4642, 4652, and

6620.

Notices to Members 99–65 (discussing

the trade reporting rules for riskless

principal transactions in Nasdaq and

OTC securities) and 99–66 (discussing,

among other things, the trading

reporting rules for the Nasdaq

InterMarket) were published in August

1999. The Notices announced that the

Riskless Principal Trade Reporting

Rules would go into effect on September

30, 1999.

Shortly after publication of Notices to

Members 99–65 and 99–66, a number of

firms represented that they were unable

to prepare their systems for compliance

with the new Riskless Principal Trade

Reporting Rules by the September 30,

1999 deadline, due (in large part) to

Year 2000 (‘‘Y2K’’) remediation and

testing requirements. In response,

Nasdaq filed a proposed interpretation

to NASD Rules 4632, 4642, 4652, and

6620, the purpose of which was to delay

the implementation date of the new

Riskless Principal Trade Reporting

Rules until March 1, 2000.16

Subsequently, a number of NASD

member firms requested a further

extension of the implementation date of

the Riskless Principal Trade Reporting

Rules.17 The firms stated that the

approach described in Notices to

Members 99–65 and 99–66 for riskless

principal trade reporting raised

significant issues that needed to be

addressed in greater detail through, for

example, interpretive guidance. The

firms requested an extension of the

implementation date until September 1,

2000 to provide time to resolve the

issues posed and to program systems.

On February 23, 2000, and then again

on July 28, 2000, Nasdaq filed a

proposed interpretation to NASD Rules

4632, 4642, 4652, and 6620 to delay the

implementation date of the new Riskless

Principal Trade Reporting Rules until

September 1, 2000 and November 1,

2000, respectively.18

Nasdaq is now requesting a further

extension of the implementation date

until February 1, 2001. Nasdaq believes

the extension is necessary to allow

Nasdaq and the firms the time to

complete the programming and testing

of systems that is necessary to

implement the new Rules and to devise

solutions to the interpretive questions

that have arisen recently with respect to

the implementation of the Rules.

Nasdaq believes that a delay in the

implementation of the Riskless

Principal Trade Reporting Rules is

reasonable in light of the efforts

required to implement the programming

changes required by the rule change and

the complex issues that have been

raised.

Nasdaq believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(6) of the

Act,19 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.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Nasdaq believes that the proposed

rule change will not result in any

burden on competition that is not

necessary or appropriate in furtherance

of the purposes of the Act, as amended.

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.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The foregoing proposal has become

effective pursuant to section

19(b)(3)(A)(i) of the Act,20 and rule 19b–

4(f)(1) 21 thereunder, in that it

constitutes a stated policy and

interpretation with respect to the

enforcement of an existing rule.

At any time within 60 days of the

filing of the 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 proposal 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. Copies of such filing will also be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to file number

SR–NASD–00–60 and should be

submitted by November 17, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.22

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–27615 Filed 10–26–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43467; File No. SR–Phlx–

00–32]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the Philadelphia Stock Exchange, Inc.

Amending Rule 748, Supervision

October 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 July 31,

2000, the Philadelphia Stock Exchange,

Inc. (‘‘Phlx’’ or ‘‘Exchange’’) filed with

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. On October

11, 2000, the Exchange submitted

Amendment No. 1 to the proposed rule