[Federal Register Volume 66, Number 3 (Thursday, January 4, 2001)]
[Notices]
[Pages 834-837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-155]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43767; File No. SR-NYSE-00-18]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Order Approving Proposed Rule Change and Notice of Filing and Order 
Accelerating Approval of Amendment Nos. 1 and 2, on a Pilot Basis 
Ending on December 21, 2001, Relating to NYSe Direct+, the Exchange's 
Automatic Execution Facility for Certain Limit Orders of 1099 Shares or 
Less

December 22, 2000.

I. Introduction

    On May 1, 2000, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'' or ``Commission''), pursuant to section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change implementing NYSe Direct+, an 
automatic execution facility for certain limit orders of 1099 shares or 
less. The proposed rule change was published for public comment in the 
Federal Register on June 15, 2000.\3\ The Commission received one 
comment letter regarding the proposed rule change.\4\ The Exchange 
submitted Amendment Nos. 1 and 2 to the proposed rule change on August 
21, 2000 \5\ and December 21, 2000,\6\ respectively. This order 
approves the proposed rule change on a pilot basis ending on December 
21, 2001 and grants accelerated approval to Amendment Nos. 1 and 2. The 
Commission is also soliciting comment on Amendment Nos. 1 and 2 to the 
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Securities Exchange Act Release No. 42913 (June 8, 2000), 64 
FR 55514.
    \4\ Letter from Craig S. Tyle, General Counsel, Investment 
Company Institute (``ICI'') to Jonathan G. Katz, Secretary, 
Commission, dated July 6, 2000 (``ICI Letter'').
    \5\ Letter from Daniel Parker Odell, Assistant Secretary, 
Exchange, to Nancy Sanow, Assistant Director, Division of Market 
Regulation (``Division''), Commission, dated August 17, 2000 
(``Amendment No. 1''). Amendment No. 1 clarifies several items 
relating to Rule 1000, 1004, and 1005. With respect to Rule 1000, 
Amendment No. 1 clarifies that orders that are not automatically 
executed will be entered in the auction market, and an order entered 
into the auction market is treated the same as any other limit order 
entered on the Exchange through the SuperDOT system. Amendment No. 1 
also clarifies that proposed Rules 1000(ii) and (v) are, in effect, 
examples of proposed Rule 1000(iv) because both relate to situations 
where the Exchange's published bid or offer is 100 shares. The 
Exchange further explained that to ``gap'' a quotation involves 
setting the bid and asked prices at a spread wider than normal in a 
stock in order to alert market participants that a special situation 
exists. With respect to Rule 1004, Amendment No. 1 clarifies that 
executions of orders entered in NYSe Direct+ (or ``auto ex orders'') 
shall elect stop limit orders as well as stop orders and percentage 
orders electable at the price of such executions. With respect to 
Rule 1005, Amendment No. 1 clarifies the prohibition on the entry of 
auto ex orders within 30 seconds for the same customer applies on a 
per stock basis. Finally, Amendment No. 1 states that the Exchange 
intends to choose the stocks eligible for participation in the pilot 
program for NYSe Direct+ based on a number of criteria, including 
volume, trading characteristics and floor location.
    \6\ Letter from James E. Buck, Secretary and Senior Vice 
President, Exchange, to Jack Drogin, Assistant Director, Division, 
Commission, dated December 20, 2000 (``Amendment No. 2''). Amendment 
No. 2 replaces the phrase ``is being completed'' with ``has been 
agreed upon'' in proposed Rule 1003. Amendment No. 2 also deletes 
the prohibition in proposed Rule 1005 against orders larger than 
1,099 shares being broken up in smaller amounts for the purpose of 
receiving an automatic execution.
---------------------------------------------------------------------------

II. Description of the Proposed Rule Change

    The proposed rule change establishes a new trading platform, NYSe 
Direct+, for the automatic execution of certain limit orders of 1099 
shares or less (``auto ex'' orders) against trading interest reflected 
in the Exchange's published quotation. Limit orders priced at or above 
the Exchange's published offer price (in the case of an auto ex order 
to buy), and limit orders priced at or below the Exchange's published 
bid price (in the case of an auto ex order to sell) are eligible for 
automatic execution via NYSe Direct+. The contra side of the auto ex 
order would be the trading interest reflected in the Exchange's bid or 
offer, in accordance with the Exchange's auction market principles of 
priority and parity codified in Exchange Rule 72. Auto ex orders would 
receive automatic executions without being exposed to the auction 
market.\7\ However, if the automatic execution feature is not 
available,\8\ the auto ex order would be entered for execution in the 
Exchange's auction market. Auto ex transactions would be identified on 
the Consolidated Tape with a unique identifier, and the Exchange's 
published bid or offer would be automatically decremented to the extent 
of the size of the auto ex order to reflect the automatic execution.
---------------------------------------------------------------------------

    \7\ To be exposed or entered in the Exchange's auction market 
means that the order would be treated like orders received from the 
SuperDOT system. See Amendment No. 1, supra note 5.
    \8\ See proposed Rule 1000.
---------------------------------------------------------------------------

    It would not be mandatory that all eligible limit orders of 1099 
shares be entered as auto ex orders NYSe Direct+. Member organizations 
(or their customers if enabled by the member organization) can choose 
to use NYSe Direct+ when the speed and certainty of an execution at the 
Exchange's published bid or offer price is in the customer's best 
interest. If a customer's interest would best be served by affording 
the customer's order the opportunity for price improvement, the member 
(or customer) may enter a limit or market order by means of the 
SuperDOT system for representation in the auction market, rather than 
an auto ex order.
    The Exchange's proposal would be implemented in proposed Rules 1000 
through 1005.\9\ Rule 1000 species the types of orders eligible for 
entry as auto ex orders. In addition, the Rule lists six instances 
where the automatic execution feature would not be available due to, 
for example, particular market situations, lack of depth in the 
published quotation, or inappropriate

[[Page 835]]

pricing of the auto ex order.\10\ Rule 1001 sets forth the execution 
parameters for orders entered in NYSe Direct+, including the contra 
side interest reflected in the Exchange's published quotation. Rule 
1001(a)(iv) provides that the specialist shall be the contra party to 
any automatic execution of an auto ex order where interest reflected in 
the published quotation against which the auto ex order was executed is 
no longer available.\11\ Rule 1002 addresses when the system is 
available for automatic execution each trading day. Rule 1003 governs 
the application of tick tests to auction market transactions when an 
auto ex order is reported at a different price after an auction market 
transaction has been agreed upon, but before the market transaction is 
reported.\12\ This rule provides that any tick test applicable to the 
auction market transaction will be based on the last reported auction 
market sale.\13\ Rule 1004 provides that auto ex orders may elect stop 
orders and percentage orders electable at the price of such 
executions.\14\ Rule 1005 prohibits the entry of auto ex orders in 
intervals of less than 30 seconds on a per stock basis.\15\ The 
Exchange also proposes to amend Exchange Rule 13 to add the definition 
of auto ex orders and to amend Exchange Rule 476A to add Rules 1000-
1005 to the list of rules subject to summary fine procedures.
---------------------------------------------------------------------------

    \9\ The Exchange file a separate proposed rule change to 
implement Rule 1006, which provides for the automatic execution of 
coupled orders of 1099 shares or less at a price that is at or 
within the Exchange's published quotation. Securities Exchange Act 
Release No. 43110 (August 2, 2000), 65 FR 48776 (August 9, 2000).
    \10\ The Exchange notes that Rules 1000(ii) and (v) are, in 
effect, examples of proposed Rule 1000(iv). See Amendment No. 1, 
supra note 5.
    \11\ For purposes of Rule 1001(a)(iv), the only circumstances 
under which interest reflected in the published quotation ``is no 
longer available'' are either: (1) The published quotation reflects 
interest that has received an execution, but the quotation has not 
been updated to reflect this fact; or (2) the published quotation 
reflects interest that has been cancelled, but the quotation has not 
been updated to reflect this fact. See Letter regarding NYSe Direct+ 
(December 21, 2000) (``Exemption Letter''). rule 1001(a)(iv) is the 
subject of an exemption issued by the Commission to the Exchange 
granting certain relief from Commission Rule 10a-1. Id.
    \12\ See Amendment No. 2, supra note 6. Rule 1003 is also the 
subject of an exemption issued by the Commission to the Exchange 
granting certain relief from Commission Rule 10a-1. See Exemption 
Letter.
    \13\ See Amendment No. 1, supra note 5.
    \14\ Amendment No. 1 clarifies that executions of auto ex order 
shall elect stop limit orders as well as stop orders and percentage 
orders electable at the price of such executions. See Amendment No. 
1, supra note 5.
    \15\ Amendment No. 1 clarifies that the prohibition on entering 
orders within 30-seconds applies on a per stock basis. See Amendment 
No. 1, supra note 5.
---------------------------------------------------------------------------

Interpretive Issues

    The Exchange also requested that the Commission approve 
interpretations of Exchange Rules 123A.40, 91, and 104. These 
interpretations arise in situations under proposed Rule 1001(a)(iv) 
where the specialist is required to take the contra side of an auto ex 
execution against the published quotation, as discussed above. In 
short, the interpretations provided by the Exchange state that when the 
specialist is required to take the contra side of an auto ex order 
pursuant to Rule 1001(a)(iv), the specialist may not be required to 
fill any stop orders elected by an auto ex execution at the price of 
the electing sale pursuant to Rule 123A.40; that the transaction 
confirmation requirements of Rule 91 do not apply; and that in any 
instance in which the specialist is effecting a direct tick 
transactions only because he or she has been required to assume the 
contra side of an auto ex execution, the transaction shall be deemed a 
``neutral'' transaction for purposes of Exchange Rule 104.

Commission Rule 10a-1.

    As stated in the notice for this proposed rule change, Commission 
Rule 10a-1 and Exchange Rule 440B do not permit short sales to be 
effected on a minus or zero minus tick. However, the Exchange proposed 
that under Rule 1001(a)(iv), the specialist should be permitted to sell 
short on a minus or zero minus tick when he or she takes the contra 
side of an auto ex execution because either: (1) the published 
quotation reflects interest that has received an execution, but the 
quotation has not been updated to reflect this fact; or (2) the 
published quotation reflects this fact. The Exchange believes that the 
specialist should be exempted from Commission Rule 10a-1 under these 
circumstances because the specialist is required to trade at a price 
set by other market participants.
    In addition, as also set forth in the notice for this proposed rule 
change, the Exchange has requested an exemption from Commission Rule 
10a-1 for Rule 1003. Rule 1003 provides that if a transaction has been 
agreed upon \16\ in the auction market, and an execution involving auto 
ex orders is reported at a different price before the auction market 
transaction is reported, any tick test applicable to the auction market 
transaction will be based on the last reported trade prior to the 
reporting of the auto ex transaction.
---------------------------------------------------------------------------

    \16\ See Amendment No. 2, supra note 6.
---------------------------------------------------------------------------

III. Comments

    The Commission received one comment letter from the Investment 
Company Institute (``ICI'').\17\ The ICI questioned the purpose and 
necessity of the 30-second delay between entry of auto ex orders. 
Specifically, the ICI stated that the delay would ``defeat the purpose 
of providing investors with a facility to automatically execute limit 
orders without intervention of a dealer.'' The ICI also strongly 
supported the idea of increasing the maximum number of shares that can 
be entered into NYSe Direct+ for automatic execution, and recommended 
that the pilot program include ``securities representing a substantial 
portion of the NYSE market, e.g., the top 100 NYSE listed securities, 
with the remainder chosen from quintiles of NYSE securities.'' In 
response to the ICI's comments on these particular issues, the Exchange 
noted that the proposed parameters are appropriate for the initial 
launch of the pilot program.\18\ The Exchange also noted that a primary 
purpose of the pilot program is to allow the Exchange, NYSe Direct + 
participants, and the Commission to examine the operation of the system 
on a controlled basis. Thus, the Exchange believes that the parameters 
regarding each of the issues noted above are appropriate at this pilot 
stage.
---------------------------------------------------------------------------

    \17\ See supra note 4.
    \18\ The Exchange responded to these concerns in a phone call 
between Brian McNamara, Vice President, Market Surveillance, NYSE, 
Donald Siemer, Director, Market Surveillance, NYSE, Rebekah Liu, 
Special Counsel, Division, Commission, and Sonia Patton, Attorney, 
Division, Commission (August 31, 2000).
---------------------------------------------------------------------------

    The ICI also questioned the prohibition on breaking up orders for 
entry into NYSe Direct+. The ICI noted that it is unclear what type of 
``order'' the proposed rules are referring to, and requested 
clarification whether a broker for an institution asked to ``work'' a 
large order could utilize NYSe Direct+ to execute all or part of the 
institution's order. In response, the Exchange has deleted this 
prohibition from the proposed rule change although it has retained the 
30-second interval between orders on a per share basis.\19\ The 
Exchange noted, moreover, that a broker ``working'' an institutional 
client's order by simply breaking the order up for entry into NYSe 
Direct+ may not be executing the order consistent with the broker's 
duty of best execution.\20\
---------------------------------------------------------------------------

    \19\ See Amendment No. 2, supra note 6.
    \20\ Id.
---------------------------------------------------------------------------

    Finally, the ICI recommended that strict price/time priority be 
applied to the execution of NYSe Direct+ orders, rather than executed 
in accordance with Exchange Rule 72, which provides for executions 
pursuant to principles of priority and precedence. Specifically, the 
ICI noted that applying strict price/time priority would ``rectify, for 
example, a situation where a market

[[Page 836]]

participant would be able to participate on the contra side of an 
automatic execution even though another participant may have placed an 
order in the NYSE earlier in time.'' In response, the Exchange stated 
that it believes that all orders, including orders entered in NYSe 
Direct+, executed on the Exchange should be subject to the same 
execution principles of priority and precedence, as set forth in 
Exchange Rule 72.\21\
---------------------------------------------------------------------------

    \21\ Id.
---------------------------------------------------------------------------

IV. Discussion

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange. In particular, 
the Commission finds that the proposed rule change is consistent with 
section 6(b)(5) of the Act \22\ which requires an Exchange to have 
rules that are designed 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. The proposed rule change is also 
consistent with section 11A(a)(1) of the Act \23\ which states that it 
is in the public interest and appropriate for the protection of 
investors and the maintenance of fair and orderly markets to assure 
economically efficient execution of securities transactions and the 
practicability of brokers executing investor orders in the best market, 
and to provide an opportunity for investors' orders to be executed 
without the participation of a dealer.\24\
---------------------------------------------------------------------------

    \22\ 15 U.S.C. 78f(b)(5).
    \23\ 15 U.S.C. 78k-1(a)(1).
    \24\ In approving the proposed rule change, the Commission has 
considered its impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The Commission finds that by allowing the automatic execution of 
limit orders against the interest reflected in the Exchange's published 
quotation, NYSe Direct+ helps to perfect the mechanism of a free and 
open market by providing a trading venue for customers who value the 
speed and certainty of automatic execution more than the opportunity 
for price improvement offered by the Exchange's agency-auction trading 
floor. NYSe Direct+ also facilitates securities transactions to the 
benefit of investors by allowing direct access by a member 
organization, or its customer, to the trading interest reflected in the 
Exchange's published quotation. The Commission notes that this direct 
access, in turn, may attract more order flow and increase the depth and 
liquidity of the Exchange's market to the benefit of investors and the 
public interest.
    The Commission further finds that NYSe Direct+ provides an 
opportunity for a customer's order to be executed with limited broker 
participation, consistent with the goals of the Act. Although a member 
firm must still act as the gateway for any customer wishing to utilize 
NYSe Direct+, the direct and automatic matching of customer limit 
orders against the interest reflected in the Exchange's quotation 
minimizes the involvement of the member firm. The Commission also 
believes that NYSe Direct+ may have the potential to lower transaction 
costs, another potential benefit to Exchange customers.
    The Commission also finds that operation of NYSe Direct+ is 
consistent with the protection of investors and the public interest and 
should help to maintain a fair and orderly market. The proposed rules 
specifically outline the terms under which a customer's order would be 
handled by the NYSe Direct+ system, and they provide for the handling 
of those orders if there is no contra-side interest in the Exchange's 
published quotation.
    The Commission finds that the Exchange has addressed the most 
significant concerns raised by the ICI Letter.\25\ The Commission 
agrees that the proposed parameters are appropriate for the initial 
launch of the pilot program. A primary purpose of the pilot program is 
to allow the Exchange, NYSe Direct+ participants, and the Commission to 
examine the operation of the system on a controlled basis. Thus, the 
Commission finds that the proposed parameters by the Exchange for NYSe 
Direct+ are appropriate at this pilot stage. The Commission notes that 
it will expect the Exchange to choose stocks eligible for the pilot 
program based on a number of appropriate criteria, including volume, 
trading characteristics and floor location.\26\
    With respect to the ICI's request for further clarification on the 
prohibition of breaking up orders of greater than 1099 shares into 
smaller amounts, the Commission notes that the Exchange amended the 
proposed rule change to delete the explicit prohibition against 
breaking up orders for the purpose of receiving an automatic execution. 
The Commission believes that amended Rule 1005 provides an appropriate 
mechanism to discourage brokers from breaking up large orders solely to 
obtain an automatic execution, while allowing brokers acting on behalf 
of institutions to use NYSe Direct+ to ``work'' large orders, 
consistent with their duty of best execution. The Commission also finds 
that for purposes of consistency and uniformity, all bids or offers 
executed on the Exchange should be subject to the execution principles 
set forth in Exchange Rule 72.
---------------------------------------------------------------------------

    \25\ See supra Section II and note 4.
    \26\ This is consistent with the Exchange's representations in 
Amendment No. 1, supra note 5.
---------------------------------------------------------------------------

Interpretative Issues

    The Commission also approves the Exchange's interpretation of 
Exchange Rules 123A.40, 91, and 104.\27\ These interpretations all 
concern a situation where, pursuant to proposed Rule 1001(a)(iv), the 
specialist is required to take the contra side of an auto ex execution 
against the published quotation, even though the specialist's interest 
was not part of the published quotation. In addition, the Commission 
has granted the Exchange exemptive relief from Commission Rule 10a-1 
for purposes of proposed Rule 1001(a)(iv).\28\ The Commission therefore 
finds the requested interpretations are appropriate and necessary for 
the proper functioning of the NYSe Direct+ trading platform.
---------------------------------------------------------------------------

    \27\ The interpretations of these Rules are as follows:
    Exchange Rule 123A.40. The specialist shall not be required to 
fill any stop orders elected by an auto ex execution at the price of 
the electing sale in any instance where the specialist was required 
by Rule 1001(a)(iv) to take the contra side of an auto ex execution.
    Exchange Rule 91. As the specialist does not accept an auto ex 
order for execution or act as agent for such order, the transaction 
confirmation requirements of Rule 91 will not apply in any instance 
where the specialist is the contra party to an auto ex execution.
    Exchange Rule 104. Exchange Rule 104 contains the specialist's 
affirmative and negative obligations, and restricts the specialists' 
ability to purchase stock on direct plus ticks, and sell stock on 
direct minus ticks. The Exchange is proposing that any instance in 
which the specialist is effecting such a direct tick transaction 
only because he or she has been required to assume the contra side 
of an auto ex execution as described above shall be deemed to be a 
``neutral'' tranaction for purposes of Rule 104, and shall be deemed 
not to be in violation of the rule. The Exchange believes that this 
interpretation is appropriate because the specialist is not setting 
the price, but is simply being required to trade at a price set by 
other market participants.
    \28\ See Exemption Letter.
---------------------------------------------------------------------------

Commission Rule 10a-1

    Commission Rule 10a-1 and Exchange Rule 440B did not permit short 
sales to be effected on a minus or zero minus tick. As discussed above, 
the Exchange has requested an exemption from Rule 10a-1 when a 
specialist is required to take the contra side of an auto ex execution 
pursuant to Exchange Rule 1001(a)(iv). In addition, the Exchange has 
requested an exemption to

[[Page 837]]

permit floor brokers to effect short sales in the auction market based 
upon the last reported transaction at the time of the agreement to the 
auction market trade, and irrespective of auto ex trades that are 
reported while the transaction is being completed, as contemplated by 
Rule 1003. In a letter dated December 21, 2000, the Commission granted 
to the Exchange certain exemptive relief from Commission Rule 10a-1 
regarding these Exchange rules for the duration of the pilot, subject 
to the conditions described in the letter.\29\ Consequently, the 
Commission finds that in light of the relief granted from Rule 10a-1, 
Rule 10a-1 does not prohibit implementation of NYSe Direct+ as 
discussed in this order, during the pilot program. If the Exchange 
decides to continue the program, the Exchange would be required to 
submit a proposed rule change extending, or requesting permanent 
approval of, the pilot, and another request for relief from Commission 
Rule 10a-1.
---------------------------------------------------------------------------

    \29\ See Exemption Letter. The exemption granted with respect to 
proposed rule 1001(a)(iv) is limited to situations where the 
specialist is required to take the contra side of an auto ex 
execution against the published quotation, even though the 
specialist's interest was not part of the published quotation, 
because: (1) The published quotation reflects interest that has 
received an execution, but the quotation has not been updated to 
reflect this fact: or (2) the published quotation reflects interest 
that had been cancelled, but the quotation has not been updated to 
reflect this fact. The no-action relief with respect to proposed 
Rule 1003 is subject to certain limitations. First, when an auto ex 
trade is reported between the time that the auction market short 
sale is agreed upon and when it is reported, and the auto ex trade 
report is at a price that would result in the auction market trade 
being reported as a minus or zero-minus tick, the auction market 
short sale must be presented to an NYSE floor official. In addition, 
the NYSE floor official must: (a) Find that the short sale was 
presented for reporting immediately after agreement to the trade; 
(b) find that the short sale was priced in compliance with Rule 10a-
1 at the time that the floor brokers agreed to the trade; (c) find 
that the short sale price is not lower than the best bid displayed 
in the auction market at the time the transaction is reported; and 
(d) direct that the trade be reported as a ``sold sale.'' Finally, 
the NYSE must keep records of all floor brokers' transactions 
relying upon this exemption, and present this information upon 
request to the Division.
---------------------------------------------------------------------------

Accelerated Approval for Amendment No. 1

    The Commission finds good cause for accelerating approval of 
Amendments Nos. 1 and 2 to the proposed rule change prior to the 
thirtieth day after publication in the Federal Register. The Commission 
notes that these Amendments provide useful clarifications to the 
proposed rules. Accordingly, the Commission finds that good cause 
exists, consistent with sections 6(b)(5) of the Act,\30\ and section 
19(b) of the Act \31\ to accelerate approval of Amendments Nos. 1 and 2 
to the proposed rule change.
---------------------------------------------------------------------------

    \30\ 15 U.S.C. 78f(b)(5).
    \31\ 15 U.S.C. 78s(b).
---------------------------------------------------------------------------

V. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning Amendments Nos. 1 and 2, including whether the 
amendments are 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 Commissions 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 NYSE. All submissions should refer to the File 
No. SR-NYSE-00-18 and should be submitted by January 25, 2001.

VI. Conclusion

    It Is Therefore Ordered, pursuant to section 19(b)(2) of the 
Act,\32\ that the proposed rule change (SR-NYSE-00-18), as amended, is 
approved on a pilot basis until December 21, 2001.
---------------------------------------------------------------------------

    \32\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\33\
---------------------------------------------------------------------------

    \33\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
[FR Doc. 01-155 Filed 1-3-01; 8:45 am]
BILLING CODE 8010-01-M