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

I. Introduction

On September 20, 2000, the Philadelphia Stock Exchange, Inc. (“Phlx” 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, Pacific Exchange, Inc. (“PCX”), and Phlx. The proposed amendment to the Linkage Plan would add the Phlx as a participant to the Linkage Plan on a permanent basis. The Phlx has submitted a singed 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 Commissions 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 Phlx 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 Phlx as a participant in the Linkage Plan is also consistent with the Rule 11Aa3-2 under the Act in that it will contribute to the maintenance of fair and orderly markets and remove impediments to the 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 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 Phlx 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.