FOR IMMEDIATE RELEASE                             2001-149


       COMMISSION APPROVES FIVE ITEMS AT OPEN MEETING

     Washington, DC, December 19, 2001—Today, in  our  final
open meeting of the year, we approved the following items:

     We  approved  the extension of a pilot  program,  until
December  31,  2002,  that exempts broker-dealers  from  the
requirement to send their balance sheets to customers  on  a
regular  basis.  To take advantage of the pilot  program,  a
broker-dealer   must   send  its   customers   net   capital
information  and  include  instructions  for  obtaining  its
balance  sheet  on  its web site or by dialing  a  toll-free
number  to  receive a copy.  We intend to  consider  a  rule
proposal  early  in 2002 that would make the  pilot  program
permanent.

     We  granted a request from the Nasdaq Stock  Market  to
modify our interpretation of Section 28(e) of the Securities
Exchange Act of 1934.  Section 28(e) provides a safe  harbor
to  money  managers who use the commission dollars of  their
advised  accounts to obtain research and brokerage services.
Among  other things, the safe harbor requires that  a  money
manager  determine  in good faith that  the  amount  of  the
commission  was  reasonable in  relation  to  the  value  of
research   and  brokerage  services  received.   Under   our
interpretation,  the  safe harbor  will  apply  to  riskless
principal  transactions  in  Nasdaq-traded  securities.   In
granting Nasdaq’s request, we are also making it clear  that
transactions in other markets that meet the requirements  of
this  interpretation will be considered to fall  within  the
interpretation.

     We  adopted amendments to our rules and forms under the
Securities   Exchange  Act  of  1934  to   enhance   company
disclosure  of employee stock option plans and other  equity
compensation  arrangements.  Starting in the second  quarter
of  next  year,  companies  will have  to  provide  detailed
information about their equity compensation plans in  a  new
table in their annual reports on Forms 10-K and 10-KSB filed
with  the  SEC.   This  information will  also  have  to  be
included  in  a company’s proxy or information statement  in
years in which the company is submitting a compensation plan
for  security holder approval.  The table will  include  the
number  and  weighted-average exercise price of  outstanding
options,  warrants and rights, and the number of  securities
available  for  future issuance under a  company's  existing
equity compensation plans.  The new disclosure will be given
separately  for  plans that have been approved  by  security
holders  and  plans that have not been approved by  security
holders.

     We  agreed  to  a recommendation from the  Division  of
Corporation Finance to adopt an amendment to Rule 135b under
the  Securities  Act of 1933 to codify the Division’s  long-
standing position that an Options Disclosure Document (ODD),
prepared pursuant to Rule 9b-1 under the Securities Exchange
Act  of 1934, is not a prospectus and not subject to Section
12(a)(2)  liability that applies to prospectuses  under  the
Securities  Act.  The recommendation comes  in  response  to
requests   for  clarification  from  the  Options   Clearing
Corporation  following a 1990 court decision and  subsequent
law  suits  that  created uncertainty  about  the  liability
issue.

     We  approved the proposal of an amendment to  Rule  146
under the Securities Act of 1933 to provide a definition for
the term “qualified purchaser” under the National Securities
Markets  Improvement  Act of 1996.  If  adopted,  securities
offered or sold to a “qualified purchaser” will be preempted
from   state   registration  requirements.    As   proposed,
“qualified purchaser” will have the same definition  as  the
term  “accredited investor” under Rule 501 of Regulation  D.
We  are  seeking public comment on the proposed  definition.
The  comment  period  will end 60  days  from  the  date  of
publication  of the proposed rule amendment in  the  Federal
Register.


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