[Federal Register Volume 70, Number 134 (Thursday, July 14, 2005)]
[Notices]
[Page 40756]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3730]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52001; File No. 4-208]


Intermarket Trading System; Order Granting Approval of the Twenty 
First Amendment to the ITS Plan Relating to the Recognition of the 
Automatic Generation of Outgoing ITS Commitments

July 8, 2005.
    On April 27, 2005, the Intermarket Trading System Operating 
Committee (``ITSOC'') submitted to the Securities and Exchange 
Commission (``Commission''), pursuant to Section 11A of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 11Aa3- thereunder,\2\ a 
proposed amendment (``Twenty First Amendment'') to the restated ITS 
Plan.\3\ The proposed amendment recognized the automatic generation of 
outgoing ITS commitments in circumstances where members in the 
Participants' markets send such commitments contemporaneously with 
trading at inferior prices, disseminating a locking bid/offer in their 
own market, or a block trade. Notice of the proposed amendment appeared 
in the Federal Register on June 6, 2005.\4\ The Commission received no 
comments on the proposed amendment. This order approves the proposed 
amendment.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78k-1.
    \2\ 17 CFR 240.11Aa3-2.
    \3\ The ITS Plan is a National Market System (``NMS'') plan, 
which was designed to facilitate intermarket trading in exchange-
listed equity securities based on current quotation information 
emanating from the linked markets. See Securities Exchange Act 
Release No. 19456 (January 27, 1983), 48 FR 4938 (February 3, 1983).
    The ITS Participants include the American Stock Exchange LLC 
(Amex''), the Boston Stock Exchange, Inc. (``BSE''); the Chicago 
Board Options Exchange, Inc. (``CBOE''); the Chicago Stock Exchange 
(``CHX''), Inc., the Cincinnati Stock Exchange, Inc. (``CSE''), the 
National Association of Securities Dealers, Inc. (``NASD''), the New 
York Stock Exchange, Inc. (``NYSE''), the Pacific Exchange, Inc. 
(``PCX''), and the Philadelphia Stock Exchange, Inc. (``Phlx'') 
(``Participants'').
    \4\ See Securities Exchange Act Release No. 51755 (May 27, 
2005), 70 FR 32853.
---------------------------------------------------------------------------

    The Commission finds that the proposed amendment is consistent with 
the Act, in particular, with Sections 11A(a)(1)(C)(ii) and (D),\5\ 
which provide for fair competition among the Participants and their 
members, and the linking of all markets for qualified securities 
through communications and data processing facilities which 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. 
Further, the Commission finds that the amendment is consistent with 
Rule 11A3-2(c)(2) under the Act,\6\ which requires among other things, 
that a plan amendment must be necessary or appropriate in the public 
interest, for the protection of investors and the maintenance of fair 
and orderly markets, and shall remove impediments to, and perfect the 
mechanisms of, a national market system. Specifically, the Commission 
believes that the proposed amendment, which permits the members in the 
Participants' markets to send computer generated commitments 
contemporaneously with trading at inferior prices, disseminating a 
locking bid/offer, or a block trade, should enable Participants to 
effect transactions that otherwise would appear to violate the trade-
through rule while simultaneously fulfilling their obligations under 
the ITS Plan.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78k-1(a)(1)(C)(ii) and (D).
    \6\ 17 CFR 240.11A3-2(c)(2).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 11A(a)(3)(B) of the 
Act \7\ that the proposed Twenty First Amendment be, and hereby is, 
approved.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78k1(a)(3)(B).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(29).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3730 Filed 7-13-05; 8:45 am]
BILLING CODE 8010-01-P