SEC Approves Options Intermarket Linkage Plan - Commission Also Issues Two Rule Proposals on Market Fragmentation

The Securities and Exchange Commission yesterday approved an options intermarket linkage plan that was jointly submitted by the Chicago Board Options Exchange, International Securities Exchange and the American Stock Exchange. The Commission also approved a rule proposal regarding the quotation obligations of options exchanges and market makers, and disclosure by broker-dealers of executions of customer options orders at prices inferior to the quote.

In addition, the Commission approved the issuance of a second rule proposal arising from its request for comments on issues of fragmentation and internalization in the securities markets. The rule proposal would require greater disclosure of order routing and order execution practices by brokers and market centers. Following publication in the Federal Register, the public is encouraged to submit comments on both proposals to the Commission in a 45-day comment period. Text of the rule proposals will be available shortly on the SEC's website, www.sec.gov.