Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
The Exchange proposes to add a new rule (Article XI, Rule 12) to require Exchange members to participate in such decimalization-related testing as the Exchange may mandate and to maintain documentation of that testing. The text of the proposed rule change is available upon request from the CHX or the Commission.
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any 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.
Although the starting dates and specific details of an industry-wide implementation plan have not yet been finalized, national securities exchanges and other market participants have begun testing the systems involved in the conversion to decimal-based trading. The CHX, in cooperation with the Commission, the Securities Industry Association, and other self-regulatory organizations, has been participating in this important testing effort. The proposed rule described in this filing requires CHX member firms to participate in such decimalization-related testing as the Exchange may require and to maintain documentation, including the results, of that testing.
Specifically, the proposed new rule requires CHX members to participate in any point-to-point and industry-wide computer testing that the Exchange may require.
These requirements are similar to those that the Exchange imposed in 1999 as part of its Year 2000 testing effort, and are similar to those currently being proposed by at least one other national securities exchange. This proposed new rule shall expire upon the full implementation of decimal pricing.
The CHX believes the proposed rule is consistent with the requirements of the Act and the rules and regulations thereunder governing national securities exchanges, and, in particular, with the requirements of Section 6(b) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act.
Written comments were neither solicited nor received with respect to the proposed rule change.
Because the foregoing rule change is concerned solely with the administration of Exchange, it has become effective pursuant to Section 19(b)(3)(A)(iii) of the Act
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, 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 Commission and nay 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, 450 Fifth Street, NW, Washington, DC. 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–CHX–00–21 and should be submitted by July 17, 2000.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.