(July 26 – 10:10 ET) – The Securities and Exchange Commission has approved a proposed intermarket linkage between the Chicago Board Options Exchange, the International Securities Exchange and the American Stock Exchange.
In October 1999, the commission ordered the options exchanges to act jointly to file a linkage plan. It received one filed jointly by the CBOE, Amex and ISE, and one each from the Philadelphia Stock Exchange and the Pacific Exchange. These were published for comment last March.
The SEC approved the linkage plan of the Amex, CBOE, and ISE, but it did not order the options exchanges to participate in it. But it has also proposed a rule requiring broker-dealers who do not participate in a linked market to disclose to clients when an order is executed at a price inferior to the best-published quote. The SEC has also proposed a rule requiring markets to honour orders coming from other markets.
The SEC is also proposing a rule that would require equity market centers (primarily exchange specialists, OTC market makers, and ECNs) to publish monthly, electronic reports that include uniform statistical measures of execution quality on a stock-by-stock basis. Brokers would be required to publish free Internet reports that describe their order routing practices. This, the commission hopes, will allow the financial press, independent analysts, consultants, and others, to analyze the data, and compare between markets and brokers.
Public comments on the proposed disclosure rules are due within 45 days.
-IE Staff