Federal Register / Vol. 65, No. 229 / Tuesday, November 28, 2000 / Notices 70851

4See Securities Exchange Act Release No. 43310

(September 20, 2000), 65 FR 58583. 5On September 20, 2000, the Commission

approved the Phlx as a participant to the Linkage

Plan on a temporary basis. See Securities Exchange

Act Release No. 43311 (September 20, 2000), 65 FR

58584 (September 29, 2000). The Commission notes

that it is concurrently approving a proposed

amendment approving the Phlx as a participant to

the Linkage Plan on a permanent basis. See

Securities Exchange Act Release No. 43573

(November 16, 2000).

6The Linkage Plan defines as ‘‘eligible exchange’’

as a national securities exchange registered with the

Commission pursuant to Section 6(a) of the Act, 15

U.S.C. 78f(a), that is a participant in the Options

Clearing Corporation and a party to the Options

Price Reporting Authority Plan for Reporting of

Consolidated Options Last Sale Reports and

Quotation Information.

7 15 U.S.C. 78k–1(a)(1)(D).

8 17 CFR 240.11Aa3–2.

9 15 U.S.C. 78k–1.

10 15 U.S.C. 78k–1(a)(3)(B).

11 17 CFR 240.11Aa3–2.

12 17 CFR 200.30–3(a)(29).

1 15 U.S.C. 78k–1.

2 17 CFR 240.11Aa3–2.

3On July 28, 2000, the Commission approved a

national market system plan for the purpose of

creating and operating an intermarket options

market linkage proposed by the American Stock

Exchange LLC (‘‘Amex’’), the Chicago Board

Options Exchange, Inc. (‘‘CBOE’’), and the

International Securities Exchange LLC (‘‘ISE’’). See

Securities Exchange Act Release No. 43086 (July 28,

2000), 65 FR 48023 (August 4, 2000).

4See Securities Exchange Act Release No. 43311

(September 20, 2000), 65 FR 58584.

5On September 20, 2000, the Commission

approved the PCX as a participant to the Linkage

Plan on a temporary basis. See Securities Exchange

Act Release No. 43310 (September 20, 2000), 65 FR

58583 (September 29, 2000). The Commission notes

that it is concurrently approving a proposed

amendment approving the PCX as a participant to

the Linkage Plan on a permanent basis. See

Securities Exchange Act Release No. 43574

(November 16, 2000).

6The Linkage Plan defines an ‘‘eligible exchange’’

as national securities exchange registered with the

Commission pursuant to Section 6(a) of the Act, 15

U.S.C. 78f(a), that is a participant in the Options

Clearing Corporation and a party to the Options

Price Reporting Authority Plan for Reporting of

Consolidated Last Sale Reports and Quotation

Information.

participant to the Linkage Plan. Notice

of filing and an order granting

temporary effectiveness of the proposal

through January 18, 2001 was published

in the Federal Register on September

29, 2000.4 The Commission did not

receive any comments on the proposal.

This order approves the proposed

amendment on a permanent basis.

II. Discussion

The current participants to the

Linkage Plan are the Amex, CBOE, ISE,

PCX, and Philadelphia Stock Exchange,

Inc. (‘‘Phlx’’).5 The proposed

amendment to the Linkage Plan would

add the PCX as a participant to the

Linkage Plan on a permanent basis. The

PCX has submitted a signed copy of the

Linkage Plan to the Commission in

accordance with the procedures set

forth in the Linkage Plan regarding the

admission of new participants. Sections

4(c) and 5(c)(ii) of the Linkage Plan

provide for the admission of new

participants, in which eligible

exchanges 6 may become a party to the

plan by: (i) Executing a copy of the plan,

as then in effect; (ii) effecting an

amendment to the plan reflecting the

addition of the new participant’s name

and obtaining the Commission’s

approval of the plan as amended to

reflect the new participant; and (iii)

paying the applicable fee.

After careful review, the Commission

finds that the proposed Linkage Plan

amendment is consistent with the

requirements of the Act and the rules

and regulations thereunder.

Specifically, the Commission believes

that the proposed amendment, which

permits the PCX to become a participant

to the Linkage Plan, is consistent with

Congress’ goal, as set forth in section

11A(a)(1)(D) of the Act,7 in which

Congress found that the linking of all

markets for qualified securities through

communication and data processing

facilities will foster efficiency, enhance

competition, increase the information

available to brokers, dealers, and

investors, facilitate the offsetting of

investors’ orders, and contribute to best

execution of such orders. The

Commission believes the proposed

amendment to include PCX as a

participant in the Linkage Plan is also

consistent with Rule 11Aa3–2 8 under

the Act in that it will contribute to the

maintenance of fair and orderly markets

and remove impediments to and perfect

the mechanisms of a national market

system by allowing the linked markets

to more easily access better prices

available on the participant exchanges.

The Commission believes that it is

necessary and appropriate in the public

interest, for the maintenance of fair and

orderly markets, to remove impediments

to, and perfect mechanisms of, a

national market system to allow the PCX

to become a participant in the Linkage

Plan. The Commission finds, therefore,

that approving the proposed Linkage

Plan amendment is appropriate and

consistent with section 11A of the Act.9

III. Conclusion

It Is Therefore Ordered, pursuant to

section 11A(a)(3)(B) of the Act 10 and

Rule 11Aa3–2 thereunder,11 that the

proposed Linkage Plan amendment is

approved and the PCX is authorized to

act jointly with the other participants to

the Linkage Plan in planning,

developing, operating, or regulating the

intermarket linkage plan as a means of

facilitating a national market system.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.12

Jonathan G. Katz,

Secretary.

[FR Doc. 00–30192 Filed 11–27–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43573, File No. 4–429]

Joint Industry Plan; Order Approving

an Amendment to the Options

Intermarket Linkage Plan to Add the

Philadelphia Stock Exchange, Inc. as a

Participant

November 16, 2000.

I. Introduction

On September 20, 2000, the

Philadelphia Stock Exchange, Inc.

(‘‘Phlx’’ or ‘‘Exchange’’) submitted to the

Securities and Exchange Commission

(‘‘SEC’’ or ‘‘Commission’’) in accordance

with section 11A of the Securities

Exchange Act of 1934 (‘‘Act’’) 1 and Rule

11Aa3–2 thereunder,2 a proposed

amendment to the Options Intermarket

Linkage Plan (‘‘Linkage Plan’’) 3 to

become a participant to the Linkage

Plan. Notice of filing and an order

granting temporary effectiveness of the

proposal through January 18, 2001 was

published in the Federal Register on

September 29, 2000.4 The Commission

did not receive any comments on the

proposal. This order approves the

proposed amendment on a permanent

basis.

II. Discussion

The current participants to the

Linkage Plan are the Amex, CBOE, ISE,

Pacific Exchange, Inc. (‘‘PCX’’), and

Phlx.5 The proposed amendment to the

Linkage Plan would add the Phlx as a

participant to the Linkage Plan on a

permanent basis. The Phlx has

submitted a singed copy of the Linkage

Plan to the Commission in accordance

with the procedures set forth in the

Linkage Plan regarding the admission of

new participants. Sections 4(c) and

5(C)(ii) of the Linkage Plan provide for

the admission of new participants, in

which eligible exchanges 6 may become

a party to the plan by: (i) Executing a

copy of the plan, as then in effect; (ii)

effecting an amendment to the plan

reflecting the addition of the new

participant’s name and obtaining the

Commissions approval of the plan as

70852 Federal Register / Vol. 65, No. 229 / Tuesday, November 28, 2000 / Notices

7 15 U.S.C. 78k–1(a)(1)(D).

8 17 CFR 240.11Aa3–2.

9 15 U.S.C. 78–1.

10 15 U.S.C. 78k–1(a)(3)(B).

11 17 CFR 240.11Aa3–2.

12 17 CFR 200.30–3(a)(29).

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

2 17 CFR 240.19b–4.

3The Amex, whose employees are subject to the

NASD Code of Conduct as of October 2000, filed

a rule proposal (No. SR–Amex–00–23) to adopt

Amex Rule 417, which is virtually identical to

proposed NASD Rule 3090. Securities Exchange Act

Release No. 43468 (October 20, 2000), 65 FR 65034

(October 31, 2000); Securities Exchange Act Release

No. 43587 (November 17, 2000).

amended to reflect the new participant;

and (iii) paying the applicable fee.

After careful review, the Commission

finds that the proposed Linkage Plan

amendment is consistent with the

requirements of the Act and the rules

and regulations thereunder.

Specifically, the Commission believes

that the proposed amendment, which

permits the Phlx to become a participant

to the Linkage Plan, is consistent with

Congress’ goal, as set forth in section

11A(a)(1)(D) of the Act,7 in which

Congress found that the linking of all

markets for qualified securities through

communication and data processing

facilities will foster efficiency, enhance

competition, increase the information

available to brokers, dealers, and

investors, facilitate the offsetting of

investors’ orders, and contribute to best

execution of such orders. The

Commission believes the proposed

amendment to include Phlx as a

participant in the Linkage Plan is also

consistent with the Rule 11Aa3–2 8

under the Act in that it will contribute

to the maintenance of fair and orderly

markets and remove impediments to the

perfect the mechanisms of a national

market system by allowing the linked

markets to more easily access better

prices available on the participant

exchanges. The Commission finds,

therefore, that approving the proposed

Linkage Plan amendment is appropriate

and consistent with section 11A of the

Act.9

III. Conclusion

It Is Therefore Ordered, pursuant to

section 11A(a)(3)(B) of the Act 10 and

Rule 11Aa3–2 thereunder,11 that the

proposed Linkage Plan amendment is

approved and the Phlx is authorized to

act jointly with the other participants to

the Linkage Plan in planning,

developing, operating, or regulating the

intermarket linkage plan as a means of

facilitating a national market system.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.12

Jonathan G. Katz,

Secretary.

[FR Doc. 00–30193 Filed 11–27–00; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–43580; File No. SR–NASD–

00–58]

Self Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the National

Association of Securities Dealers, Inc.

Relating to Member Firm Transactions

With Association Employees

November 17, 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

September 25, 2000, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’), through its

wholly owned subsidiary, NASD

Regulation, Inc. (‘‘NASD Regulation’’)

filed with the Securities and Exchange

Commission (‘‘Commission’’) the

proposed rule change as described in

Items I and II below, which Items have

been prepared by NASD Regulation. 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

NASD Regulation proposes to adopt

new NASD Rule 3090 relating to

member firm transactions with NASD

employees. Proposed new language is

italicized.

* * * * *

3090. Transactions Involving

Association and American Stock

Exchange Employees

(a) When a member has actual notice

that an Association or American Stock

Exchange employee has a financial

interest in, or controls trading in, an

account, the member shall promptly

obtain and implement an instruction

from the employee directing that

duplicate account statements be

provided by the member to the

Association.

(b) No member shall directly or

indirectly make any loan of money or

securities to any Association or

American Stock Exchange employee.

Provided, however, that this prohibition

does not apply to loans made in the

context of disclosed, routine banking

and brokerage agreements, or loans that

are clearly motivated by a personal or

family relationship.

(c) Notwithstanding the annual dollar

limitation set forth in Conduct Rule

3060(a), no member shall directly or

indirectly give, or permit to be given,

anything of more than nominal value to

any Association or American Stock

Exchange employee who has

responsibility for a regulatory matter

that involves the member. For purposes

of this subsection, the term ‘‘regulatory

matter’’ includes, but is not limited to,

examinations, disciplinary proceedings,

membership applications, listing

applications, delisting proceedings, and

dispute-resolution proceedings that

involve the member.

* * * * *

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission,

NASD Regulation 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 III below. NASD

Regulation 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 NASD Code of Conduct imposes

detailed ethics and conflict-of-interest

requirements on Association employees

(i.e., employees of the NASD and all of

its subsidiary and affiliated companies).

The NASD is proposing a new rule,

NASD Conduct Rule 3090, that will

impose parallel requirements on NASD

members in their dealings with

Association and American Stock

Exchange (‘‘Amex’’) employees.3

Proposed NASD Rule 3090 addresses

three areas: (1) Providing duplicate

statements for brokerage accounts in

which Association or Amex employees

have a financial interest or can control

trading; (2) loans by NASD members to

Association or Amex employees; and (3)

gifts by NASD members to Association

or Amex employees.