FOR IMMEDIATE RELEASE                                 2002-48


 Options Exchanges Commit to Timetable for Intermarket Linkage
                               
     Washington, D.C., March 28, 2002 — The Securities and
Exchange Commission today announced that the five U.S. options
exchanges have committed to a timetable for testing and
implementing their intermarket linkage.  The options
intermarket linkage is an important step in improving options
customers’ ability to receive the best prices available.
     
     In a March 15 letter to SEC Chairman Harvey L. Pitt, the
chairmen of the options committed to the following:

  ·  The options exchanges will begin intermarket testing of
     the linkage they are developing by Dec. 1, 2002, and will
     implement the first phase of the linkage no later than Feb. 1,
     2003 and the second phase of the linkage no later than April
     30, 2003.

·    The options exchanges also agreed to file with the
     Commission, by April 15, 2002, an amendment to the options
     intermarket linkage plan to incorporate this testing and
     implementation timetable, and to require that each exchange
     provide to the Commission a detailed implementation project
     plan, as well as monthly reports on the status of its
     implementation project.  If the Commission approves this
     amendment, any failure by the exchanges to meet the testing 
     and implementation deadlines would be a violation of 
     Commission rules.

·    Finally, the options exchanges agreed that the amendment
     they will file by April 15, 2002, will include a change to the
     options intermarket linkage plan that would permit a
     participating exchange to withdraw from the linkage plan only
     if it can satisfy the Commission that it can accomplish,
     through alternative means, the same goals as the plan of
     limiting the likelihood of customers’ order being executed at
     prices inferior to the best available price.
     
     If the Commission approves this change to the options
intermarket linkage plan, the principal purpose of the
Commission’s Trade-Through Disclosure Rule, Rule 11Ac1-7 under
the Securities Exchange Act of 1934 – to require customers’
orders to be executed on exchanges that participate in the
linkage, absent disclosure to the contrary – would be
accomplished. The Commission adopted the Trade-Through
Disclosure Rule in November 2000 but has twice extended the
initial compliance date for the Rule, more recently until April
1, 2002.
     
     In light of the options exchanges’ recent commitments and
the expectation that the amendment will be filed within the
next two weeks, the Commission granted a temporary exemption,
until July 1, 2002, for broker-dealers from the Trade-Through
Disclosure Rule.  In addition, the Commission directed the
staff to develop a proposal to repeal the Trade-Through
Disclosure Rule. At the time the Commission considers whether
to propose such a repeal, it will also consider an extension of
the temporary exemption to allow sufficient time for
consideration of comments and, if appropriate, to finalize the
repeal.




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