[Federal Register Volume 65, Number 147 (Monday, July 31, 2000)]
[Notices]
[Pages 46755-46756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19231]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43064; File No. SR-Phlx-00-55]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Philadelphia Stock 
Exchange, Inc., Amending Its Rules To Mandate Decimal Pricing Testing

July 21, 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 11, 2000, the Philadelphia Stock Exchange, Inc. (``Phlx'' 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 Phlx. The Phlx has 
designated this proposal as one concerned solely with the 
administration of the Phlx 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to amend Phlx Rule 650 (currently titled 
``Mandatory Participation in Year 2000 Testing'') \4\ to require 
members and member organizations to participate in computer systems 
tests designed to prepare for the securities industry's conversion to 
decimal pricing. The Exchange proposes to change the title of Phlx 650 
to ``Mandatory Participation in Decimalization Testing.''
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    \4\ Testing in connection with the Year 2000 date change has 
been completed and the current requirements of the rule are no 
longer necessary. Telephone conversion between Jurij Trypupenko, 
Counsel, Phlx, and Matthew Boesch, Division of Market Regulation, 
Commission, on July 14, 2000.
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    The text of the proposed rule change is available upon request from 
the Phlx 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

[[Page 46756]]

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
    The Exchange, in cooperation with the Commission, other self-
regulatory organizations, and the Securities Industry Association, has 
been working toward a successful transition to decimal pricing. Advance 
testing by and among the various securities industry constituencies its 
necessary to avoid widespread problems during the transition. The 
Exchange has been conducting point-to-point testing of computers and 
computer-related systems of ``upstairs'' member firms that have 
computer interfaces with the Exchange \5\ to ascertain the 
compatibility of such systems with the planned conversion to decimal 
pricing.
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    \5\ Member firms that have computer equipment on the trading 
floors of the Exchange generally are exempted from point-to-point 
testing because the Exchange's internal testing encompasses all on-
floor equipment and interfaces.
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    The purpose of the proposed rule change is to bring the efforts of 
the Phlx regarding decimal pricing testing into conformity with 
industry-wide decimalization testing efforts and to make mandatory the 
point-to-point testing of computers and computer-related systems which 
interface with the Exchange's systems. The rule, as amended, would 
require members and member firms that undergo decimalization testing to 
provide reports of such tests to the Exchange. According to the rule, 
the Exchange may indicate the manner and frequency of the testing and 
reporting requirements.
    A member or member organization that violates the rule may be 
subject to disciplinary action pursuant to the Exchange's rules.\6\
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    \6\ Rule 650 provides that a member or member firm can be 
exempted from the requirements of the rule if the member or member 
firm (1) cannot be accommodated in the testing schedule, (2) does 
not employ computers in its business, (3) has an electronic 
interface through a service provider that conducts successful 
testing with the Exchange; or for other reasons determined by the 
Exchange.
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    The rule will expire automatically once decimal pricing has been 
fully implemented industry-wide.
2. Statutory Basis
    The Phlx believes that rule change, 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 protect 
investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
impose any inappropriate 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 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(3).
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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, N.W., Washington, D.C. 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 
Exchange. All submissions should refer to File No. SR-Phlx-00-55 and 
should be submitted by August 21, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Jonathan G. Katz,
Secretary.
[FR Doc. 00-19231 Filed 7-28-00; 8:45 am]
BILLING CODE 8010-01-M