[Federal Register Volume 65, Number 175 (Friday, September 8, 2000)]
[Notices]
[Pages 54571-54572]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23076]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43236; File No. 4-208]


Intermarket Trading System; Notice of Filing and Temporary 
Summary Effectiveness of the Sixteenth Amendment to the ITS Plan 
Relating to Decimal Pricing in Listed Securities

August 31, 2000.
    Pursuant to Rule 11Aa3-2 under the Securities Exchange Act of 1934 
(``Act''),\1\ notice is hereby given that on August 24, 2000, the 
Intermarket Trading System (``ITS'') submitted to the Securities and 
Exchange Commission (``Commission'') an amendment (``Sixteenth 
Amendment'') to the restated ITS Plan.\2\ The ITS Participants filed 
the amendment to: (1) Recognize the transition to decimal pricing; (2) 
reduce the Pre-Opening price change parameter for certain securities; 
and (3) expand the Pre-Opening price change parameters for certain 
stocks. The Commission is publishing this notice to solicit comments on 
the amendment

[[Page 54572]]

from interested persons. While comment is being solicited on the 
proposed amendment, the Commission has determined to make the proposed 
amendment summarily effective upon publication of notice on a temporary 
basis.\3\
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    \1\ 17 CFR 240.11Aa3-2.
    \2\ The ITS is a National Market System (``NMS'') plan approved 
by the Commission pursuant to Section 11A of the Act and Rule 11Aa3-
1. See Securities Exchange act Release No. 19456 (January 27, 1983), 
48 FR 4938. The ITS is a communications and order routing network 
linking eight national securities exchanges and the electronic over-
the-counter (``OTC'') market operated by the National Association of 
Securities Dealers, Inc. (``NASD)''. The ITS was designed to 
facilities intermarket trading in exchange-listed equity securities 
based on current quotation information emanating from the linked 
markets.
    Participants to the ITS Plan include the American Stock 
Exchange, Inc. (``Amex''), the Boston Stock Exchange, Inc. 
(``BSE''), the Chicago Board Options Exchange, Inc., the Chicago 
Stock Exchange, Inc., the Cincinnati Stock Exchange, Inc., the NASD, 
the New York Stock Exchange, Inc., the Pacific Exchange, Inc. 
(``PCX''), and the Philadelphia Stock Exchange, Inc. (collectively, 
``Participants'')
    \3\ Exchange Act Rule 11Aa3-2(c)(4) allows the Commission to 
summarily put into effect on a temporarily basis a Plan amendment 
``if the Commission finds that such action is necessary or 
appropriate in the public interest, for the protection of investors 
or the maintenance of fair and orderly markets, to remove 
impediments to, and perfect mechanisms of, a national market system 
or otherwise in furtherance of the purposes of the Act.''
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I. Description of the Amendment

    The purpose of the proposed amendment is to: (1) Recognize the 
transition to decimal pricing, which began on August 28, 2000; (2) 
reduce the Pre-Opening price change parameter for certain Securities 
from \1/8\ point $(0.125) to $.10; and (3) expand the Pre-Opening price 
change parameters for certain stocks, which are reported on Network B 
of the Consolidated Tape Association, similar to those stocks reported 
on network A.\4\
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    \4\ The Commission notes that the Fifteenth Amendment to the 
restated ITS Plan will be published for comment on September 1, 
2000. The Sixteenth Amendment contains text that is proposed to be 
added to the ITS Plan through the Fifteenth Amendment. Among other 
things, this text recognizes the operation of Remote Specialists on 
the BSE and PCX. See Securities Exchange Act Release No. 43240 
(September 1, 2000).
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II. Discussion

    The Commission has made a preliminary determination that the 
proposed amendment is consistent with the public interest, the 
protection of investors, the maintenance of fair and orderly markets, 
and the removal of impediments to, and perfection of the mechanisms of, 
a national market system. While comment is being solicited on the 
proposed amendment, the Commission therefore will make the amendment 
summarily effective on a temporary basis upon publication of notice of 
the amendment.\5\
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    \5\ See Exchange Act Rules 11Aa3-2(c)(4).
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    The Commission believes that temporary effectiveness of the 
amendment is consistent with the public interest, the protection of 
investors, and the maintenance of fair orderly markets because the 
amendment is necessary to accommodate decimal pricing, the new method 
of pricing for equity securities and options. The changes to the ITS 
Plan are necessary to accommodate this transition to decimals by 
providing for intermarket trading in decimals. On June 8, 2000, the 
Commission ordered the self-regulatory organizations (``SROs'') to 
submit a plan that will begin phasing in decimal pricing in equity 
securities and options on or before September 5, 2000, and complete 
this phase in no later than April 9, 2001.\6\ Since this order, the 
SROs have submitted a phase-in plan and rule filings necessary to 
implement decimal pricing. The Sixteenth Amendment to the ITS Plan is 
another step in the process of the market-wide conversion to decimal 
pricing.
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    \6\ See Securities Exchange Act Release No. 42914 (June 8, 
2000), 65 FR 38010 (June 19, 2000).
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III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the proposed amendment, including whether the 
proposed Plan amendment 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 Plan amendment change 
that are filed with the Commission, and all written communications 
relating to the proposed Plan amendment 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 at the Commission's Public Reference Room. 
Copies of such Plan amendment will also be available for inspection and 
copying at the principal office of the ITS. All submissions should 
refer to File No. 4-208 and should be submitted by September 29, 2000.

IV. Conclusion

    The Plan amendment is hereby made summarily effective on a 
temporary basis not to exceed January 8, 2001, pursuant to Exchange Act 
Rule 11Aa3-2(c)(4).\7\
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    \7\ 17 CFR 240.11Aa3-2(c)(4).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
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    \8\ 17 CFR 200.30-3(a)(29).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-23076 Filed 9-7-00; 8:45 am]
BILLING CODE 8010-01-M