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Rule

Regulation of Exchanges and Alternative Trading Systems; Technical Amendments

Action

Technical Amendments.

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).

Unified Agenda

Regulation of Alternative Trading Systems and National Securities Exchanges

3 actions from April 29th, 1998 to November 1998

  • April 29th, 1998
  • July 28th, 1998
    • NPRM Comment Period End
  • November 1998
    • Final Rule
 

Table of Contents Back to Top

EFFECTIVE DATE: Back to Top

March 7, 2000.

FOR FURTHER INFORMATION CONTACT: Back to Top

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: Back to Top

Background Back to Top

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 [1] The Commission also repealed Exchange Act Rule 17a-23 and amended the books and records rules by transferring the recordkeeping requirements from Rule 17a-23 to Rules 17a-3 and 17a-4, as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).

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 Back to Top

begin regulatory text

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 Back to Top

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, 78 1, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78 ll (d), 78mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 80b-11, unless otherwise noted.

* * * * *

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

§ 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 § 240.17a-3.

* * * * *

PART 242—REGULATIONS M AND ATS Back to Top

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), 78 l, 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.

§ 242.301 [Amended]

4.In § 242.301, the first sentence of paragraph (b)(4), the reference “(b)(3)(iv)” is revised to read “(b)(3)(iii)”.

end regulatory text

Dated: March 7, 2000.

Jonathan G. Katz,

Secretary.

[FR Doc. 00-5993 Filed 3-10-00; 8:45 am]

BILLING CODE 8010-01-M

Footnotes Back to Top

1. Securities Exchange Act Release No. 40760 (December 8, 1998), 63 FR 70844 (December 22, 1998).

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