Joint Industry Plan; Order Approving an Amendment To the Options Intermarket Linkage Plan to Add the Pacific Exchange, Inc. as a Participant

I. Introduction

On September 20, 2000, the Pacific Exchange, Inc. (“PCX” or “Exchange”) submitted to the Securities and Exchange Commission (“SEC” or “Commission”) in accordance with section 11A of the Securities Exchange Act of 1934 (“Act”) and Rule 11Aa3-2 thereunder, a proposed amendment to the Options Intermarket Linkage Plan (“Linkage Plan”) to become a participant to the Linkage Plan. Notice of filing and an order granting temporary effectiveness of the proposal through January 18, 2001 was published in the Federal Register on September 29, 2000. The Commission did not receive any comments on the proposal. This order approves the proposed amendment on a permanent basis.

II. Discussion

The current participants to the Linkage Plan are the Amex, CBOE, ISE, PCX, and Philadelphia Stock Exchange, Inc. (“Phlx”). The proposed amendment to the Linkage Plan would add the PCX as a participant to the Linkage Plan on a permanent basis. The PCX has submitted a signed copy of the Linkage Plan to the Commission in accordance with the procedures set forth in the Linkage Plan regarding the admission of new participants. Sections 4(c) and 5(c)(ii) of the Linkage Plan provide for the admission of new participants, in which eligible exchanges may become a party to the plan by: (i) Executing a copy of the plan, as then in effect; (ii) effecting an amendment to the plan reflecting the addition of the new participant's name and obtaining the Commission's approval of the plan as amended to reflect the new participant; and (iii) paying the applicable fee.

After careful review, the Commission finds that the proposed Linkage Plan amendment is consistent with the requirements of the Act and the rules and regulations thereunder. Specifically, the Commission believes that the proposed amendment, which permits the PCX to become a participant to the Linkage Plan, is consistent with Congress' goal, as set forth in section 11A(a)(1)(D) of the Act, in which Congress found that the linking of all markets for qualified securities through communication and data processing facilities will 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. The Commission believes the proposed amendment to include PCX as a participant in the Linkage Plan is also consistent with Rule 11Aa3-2 under the Act in that it will contribute to the maintenance of fair and orderly markets and remove impediments to and perfect the mechanisms of a national market system by allowing the linked markets to more easily access better prices available on the participant exchanges. The Commission believes that it is necessary and appropriate in the public interest, for the maintenance of fair and orderly markets, to remove impediments to, and perfect mechanisms of, a national market system to allow the PCX to become a participant in the Linkage Plan. The Commission finds, therefore, that approving the proposed Linkage Plan amendment is appropriate and consistent with section 11A of the Act.

III. Conclusion

It Is Therefore Ordered, pursuant to section 11A(a)(3)(B) of the Act and Rule 11Aa3-2 thereunder, that the proposed Linkage Plan amendment is approved and the PCX is authorized to act jointly with the other participants to the Linkage Plan in planning, developing, operating, or regulating the intermarket linkage plan as a means of facilitating a national market system.