[Federal Register Volume 65, Number 49 (Monday, March 13, 2000)]
[Rules and Regulations]
[Page 13235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-5993]



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 Rules and Regulations
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  Federal Register / Vol. 65, No. 49 / Monday, March 13, 2000 / Rules 
and Regulations  

[[Page 13235]]



SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 240 and 242

[Release No. 34-40760B; File No. S7-12-98]
RIN 3235-AH41


Regulation of Exchanges and Alternative Trading Systems; 
Technical Amendments

AGENCY: Securities and Exchange Commission.

ACTION: Technical amendments.

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SUMMARY: The Securities and Exchange Commission (``Commission'') today 
is making a technical change to Exchange Act Rules 17a-4(b)(1) and 
301(b)(4). These and other rules and rule amendments that relate to the 
regulation of exchanges and alternative trading systems were published 
on December 22, 1998 (63 FR 70844).

EFFECTIVE DATE: March 7, 2000.

FOR FURTHER INFORMATION CONTACT: Elizabeth King, Associate Director, at 
(202) 942-0140, Constance Kiggins, Special Counsel, at (202) 942-0059, 
and John Roeser, Attorney, at (202) 942-0762, Division of Market 
Regulation.

SUPPLEMENTARY INFORMATION:   

Background

    On December 8, 1998, the Commission adopted new rules and rule 
amendments regarding the regulation of exchanges and alternative 
trading systems.\1\ The Commission also repealed Exchange Act Rule 17a-
23 and amended the books and records rules by transferring the 
recordkeeping requirements from Rule 17a-23 to Rules 17a-3 and 17a-4, 
as those rules apply to broker-dealer internal trading systems. The 
Commission amended Exchange Act Rule 17a-3 by adding paragraph (a)(16), 
which requires broker-dealers to make records regarding the activities 
of internal broker-dealer systems.\2\ The Commission stated in the 
adopting release that the amendments to Exchange Act Rule 17a-4 would 
require that the records required under Rule 17a-3(a)(16) be preserved 
for three years, the first two years in an accessible place. This 
requirement, however, was not included in the amended rule language of 
Rule 17a-4. Consequently, the Commission is making a technical 
amendment to Rule 17a-4(b)(1) to include the records required under 
Rule 17a-3(a)(16).
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    \1\ Securities Exchange Act Release No. 40760 (December 8, 
1998), 63 FR 70844 (December 22, 1998).
    \2\ 17 CFR 240.17a-3(a)(16).
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    In addition, Exchange Act Rule 301(b)(4) contains a typographical 
error that may prove misleading and requires clarification. 
Specifically, the first sentence of Rule 301(b)(4), prohibits an 
alternative trading system from charging fees to broker-dealers, that 
access the alternative trading system through a national securities 
exchange or national securities association, that are inconsistent with 
equivalent access, as ``required by paragraph (b)(3)(iv).'' The 
equivalent access requirement, however, is a paragraph (b)(3)(iii). The 
Commission is making a technical amendment to correctly refer to the 
equivalent access requirement in paragraph (b)(3)(iii).

List of Subjects

17 CFR Part 240

    Brokers-dealers, Fraud, Issuers, Reporting and recordkeeping 
requirements, Securities.

17 CFR Part 242

    Securities.

    Accordingly, Title 17 CFR Part II is amended by making the 
following technical amendments:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

    1. The authority citation for Part 240 continues to read in part as 
follows:

    Authority:  15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77eee, 
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 78k, 
78k-1, 781, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll(d), 
78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 
80b-11, unless otherwise noted.
* * * * *


    2. Sec. 240.17a-4 is amended by revising paragraph (b)(1) to read 
as follows:


Sec. 240.17a-4  Records to be preserved by certain members, brokers and 
dealers.

* * * * *
    (b) * * *
    (1) All records required to be made pursuant to paragraphs (a)(4), 
(a)(6), (a)(7), (a)(8), (a)(9), (a)(10), and (a)(16) of Sec. 240.17a-3.
* * * * *

PART 242--REGULATIONS M AND ATS

    3. The authority citation for part 242 continues to read as 
follows:

    Authority:  15 U.S.C. 77g, 77q(a), 77s(a), 78b, 78c, 78i(a), 
78j, 78k-1(c), 78l, 78m, 78mm, 78n, 78o(b), 78o(c), 78o(g), 78q(a), 
78q(b), 78q(h), 78w(a), 78dd-1, 80a-23, 80a-29, and 80a-37.


Sec. 242.301  [Amended]

    4. In Sec. 242.301, the first sentence of paragraph (b)(4), the 
reference ``(b)(3)(iv)'' is revised to read ``(b)(3)(iii)''.

    Dated: March 7, 2000.
Jonathan G. Katz,
Secretary.
[FR Doc. 00-5993 Filed 3-10-00; 8:45 am]
BILLING CODE 8010-01-M