Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”), and Rule 19b-4 thereunder, 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, 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.
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”)  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.”
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 Start Printed Page 46756any 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
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  to ascertain the compatibility of such systems with the planned conversion to decimal pricing.
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.
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  in general and furthers the objectives of Section 6(b)(5)  in particular in that it is designed to protect investors and the public interest.
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  and subparagraph (f)(3) of Rule 19b-4 thereunder. 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.
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.Start Signature
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Jonathan G. Katz,
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.Back to Citation
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.Back to Citation
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.Back to Citation
[FR Doc. 00-19231 Filed 7-28-00; 8:45 am]
BILLING CODE 8010-01-M