Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Its Instant Liquidity Access Rules, 5259-5260 [E5-359]
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Federal Register / Vol. 70, No. 20 / Tuesday, February 1, 2005 / Notices
By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 05–1910 Filed 1–28–05; 3:01 pm]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51068; File No. SR–BSE–
2005–02]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Relating to Its
Instant Liquidity Access Rules
January 21, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder 2
notice is hereby given that on January 7,
2005, the Boston Stock Exchange, Inc.
(‘‘Exchange’’ or ‘‘BSE’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule as
described in Items I and II below, which
Items have been prepared by the
Exchange. The proposed rule change
has been filed by the Exchange as a noncontroversial filing pursuant to Section
19(b)(3)(A) of the Act 3 and Rule 19b–
4(f)(6) thereunder,4 which renders it
effective upon filing with the
Commission. The Commission is
publishing this notice to solicit
comments on the proposed rule from
interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
rules regarding Instant Liquidity Access
(‘‘ILA’’).
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements is available on the BSE’s
Web site (https://www.bostonstock.com),
at the BSE’s Office of the Secretary, and
at the Commission’s Public Reference
Room. The Exchange has prepared
summaries, set forth in Sections A, B,
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(6).
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The purpose of the proposed rule
change is to amend a section of the
Rules of the Board of Governors of the
Boston Stock Exchange (‘‘BSE Rules’’)
relating to ILA. In Chapter I, Section 3
of the BSE Rules ‘‘Instant Liquidity
Access (ILA) Order’’ is defined as ‘‘a
round-lot limit order of no less than
100, nor more than 1000, shares priced
at the Exchange’s published offer (in the
case of a buy) or at the Exchange’s
published bid (in the case of an order to
sell), which a member or member
organization has entered for immediate
execution in accordance with, and to
the extent provided by, Chapter XXXIII,
Section 8 (Instant Liquidity Access) of
these Rules.’’ The Exchange is
proposing to remove the phrase ‘‘nor
more than 1000’’ from the definition,
thereby removing any size restriction of
ILA orders, aside from the requirement
that they be round-lot orders of at least
100 shares.
When the ILA rules were originally
drafted, the Exchange built certain
protections, including the 1000 share
size limit of an ILA order, into its rules
to provide Exchange specialists time to
adjust to the new type of execution
being offered through ILA. The
Exchange and its specialists have now
had several months of experience with
ILA, and both Exchange customers and
specialists have requested that various
aspects of the ILA rules be changed so
that ILA can be utilized for a larger
percentage of orders. For example, the
Exchange recently filed a rule proposal
with the Commission to remove rule
language which prevented orders being
entered by one customer in intervals
less than thirty seconds.5 The concern
in that filing centered on the potential
for rapid-fire orders overwhelming the
BSE specialists. However, the BSE has
addressed that concern through
systemic enhancements which,
according to ILA rules, automatically
cancel an ILA order if it cannot be
immediately executed. Accordingly,
because systemic enhancements have
obviated the need for such a restriction,
the Exchange sought to abolish the
limitation.
Similarly, in the present proposal,
systemic enhancements have made the
1 15
VerDate jul<14>2003
15:06 Jan 31, 2005
1000 share limitation unnecessary. The
Exchange’s BEACON trading system is
able to respond to orders of all sizes
equally and there is no need for a size
limitation. Accordingly, the BSE and its
specialists seek to encourage more
customers to utilize ILA, and thereby
have their orders, regardless of size,
instantly executed.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of Section 6(b) of the Act 6
in general, and Section 6(b)(5) 7 in
particular, in that it is designed to
promote just and equitable principles of
trade, to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system, and is not designed to permit
unfair discrimination between
customers, brokers, or dealers, or to
regulate by virtue of any authority
matters not related to the administration
of the Exchange.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange has neither solicited
nor received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the
proposed rule change as one that: (1)
Does not significantly affect the
protection of investors or the public
interest; (2) does not impose any
significant burden on competition; and
(3) does not become operative for 30
days from the date of filing, or such
shorter time as the Commission may
designate if consistent with the
protection of investors and the public
interest pursuant to Section 19(b)(3)(A)
of the Act 8 and Rule 19b–4(f)(6) 9
thereunder.
The Commission, consistent with the
protection of investors and the public
interest, has determined to make the
proposed rule change effective as of the
6 15
2 17
5 See
Securities Exchange Act Release No. 51031
(January 12, 2005), 70 FR 3404 (January 24, 2005)
(SR–BSE–2004–46).
Jkt 205001
PO 00000
Frm 00131
Fmt 4703
Sfmt 4703
5259
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
8 15 U.S.C. 78s(b)(3)(a).
9 17 CFR 240.19b–4(f)(6).
7 15
E:\FR\FM\01FEN1.SGM
01FEN1
5260
Federal Register / Vol. 70, No. 20 / Tuesday, February 1, 2005 / Notices
date of this order.10 The Commission
believes that the proposal could provide
investors with orders larger than 1000
shares with more efficient and orderly
executions.
At any time within 60 days of the
filing of the proposed rule change, the
Commission may summarily abrogate
the proposed rule change if it appears to
the Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send E-mail to rulecomments@sec.gov. Please include File
Number SR–BSE–2005–02 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
450 Fifth Street, NW., Washington, DC
20549–0609.
All submissions should refer to File
Number SR–BSE–2005–02. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of such filing also will be
available for inspection and copying at
the principal office of the BSE. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR–BSE–2005–02 and should
be submitted on or before February 22,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–359 Filed 1–31–05; 8:45 am]
BILLING CODE 8010–01–U
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51069; File No. SR–BSE–
2005–05]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
and Order Granting Accelerated
Approval to a Proposed Rule Change
Relating to Position Limits and
Exercise Limits on the Boston Options
Exchange for Options on Standard and
Poor’s Depositary Receipts
January 21, 2005.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
20, 2005, the Boston Stock Exchange,
Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been prepared by the Exchange. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons. In
addition, the Commission is granting
accelerated approval of the proposed
rule change.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend its
Boston Options Exchange Rules (‘‘BOX
Rules’’) to increase position limits and
exercise limits for options on Standard
and Poor’s Depositary Receipts
(‘‘SPDRs’’). The text of the proposed
rule change is available on the
Exchange’s Web site (https://
www.bostonstock.com), at the BSE’s
10 For
purposes only of waiving the 30-day
operative period, the Commission has considered
the rule’s impact on efficiency, competition and
capital formation. 15 U.S.C. 78c(f).
VerDate jul<14>2003
15:06 Jan 31, 2005
Jkt 205001
PO 00000
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 2 17 CFR 240.19b–4.
1 15
Frm 00132
Fmt 4703
Sfmt 4703
Office of the Secretary, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it had received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item III below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The BSE began trading options on
SPDRs on January 10, 2005 on the
Boston Options Exchange. Currently,
under BOX Rules Chapter III Section 7
and Section 9, position limits and
exercise limits for options on SPDRs are
75,000 contracts on the same side of the
market. The Exchange proposes to
amend Supplementary Material .01 to
Section 7 of Chapter III and
Supplementary Material .01 to Section 9
of Chapter III of the BOX Rules to
increase position limits and exercise
limits for options on SPDRs to 300,000
contracts on the same side of the
market.
Given the expected institutional
demand for options on SPDRs, the BSE
believes the current equity position
limit of 75,000 contracts to be too low
and a deterrent to the successful trading
of the product. Options on SPDRs are
1⁄10th the size of options on the Standard
and Poor’s 500 Index (‘‘SPX’’).3 Thus, a
position limit of 75,000 contracts in
SPDR options is equivalent to a 7,500
contract position limit in SPX options.
Traders who trade SPDR options to
hedge positions in SPX options are
likely to find a position limit of 75,000
contracts in SPDR options too
restrictive, which may adversely affect
BOX’s ability to provide liquidity in this
product.
Comparable products such as options
on the Nasdaq-100 Index Tracking Stock
(‘‘QQQ’’) are subject to a 300,000contract limit.4 The BSE proposes that
3 Options on SPX are traded on the Chicago Board
Options Exchange.
4 See Supplementary Material .01 to Section 7 of
Chapter III and Supplementary Material .01 to
Section 9 of Chapter III of the BOX Rules.
E:\FR\FM\01FEN1.SGM
01FEN1
]]>Agencies
[Federal Register Volume 70, Number 20 (Tuesday, February 1, 2005)]
[Notices]
[Pages 5259-5260]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-359]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51068; File No. SR-BSE-2005-02]
Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Its Instant Liquidity Access Rules
January 21, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'') \1\ and Rule 19b-4 thereunder \2\ notice is hereby given that
on January 7, 2005, the Boston Stock Exchange, Inc. (``Exchange'' or
``BSE'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule as described in Items I and II
below, which Items have been prepared by the Exchange. The proposed
rule change has been filed by the Exchange as a non-controversial
filing pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-
4(f)(6) thereunder,\4\ which renders it effective upon filing with the
Commission. The Commission is publishing this notice to solicit
comments on the proposed rule from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend its rules regarding Instant
Liquidity Access (``ILA'').
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements is available on the BSE's Web site (https://
www.bostonstock.com), at the BSE's Office of the Secretary, and at the
Commission's Public Reference Room. The Exchange has prepared
summaries, set forth in Sections A, B, and C below, of the most
significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of the proposed rule change is to amend a section of
the Rules of the Board of Governors of the Boston Stock Exchange (``BSE
Rules'') relating to ILA. In Chapter I, Section 3 of the BSE Rules
``Instant Liquidity Access (ILA) Order'' is defined as ``a round-lot
limit order of no less than 100, nor more than 1000, shares priced at
the Exchange's published offer (in the case of a buy) or at the
Exchange's published bid (in the case of an order to sell), which a
member or member organization has entered for immediate execution in
accordance with, and to the extent provided by, Chapter XXXIII, Section
8 (Instant Liquidity Access) of these Rules.'' The Exchange is
proposing to remove the phrase ``nor more than 1000'' from the
definition, thereby removing any size restriction of ILA orders, aside
from the requirement that they be round-lot orders of at least 100
shares.
When the ILA rules were originally drafted, the Exchange built
certain protections, including the 1000 share size limit of an ILA
order, into its rules to provide Exchange specialists time to adjust to
the new type of execution being offered through ILA. The Exchange and
its specialists have now had several months of experience with ILA, and
both Exchange customers and specialists have requested that various
aspects of the ILA rules be changed so that ILA can be utilized for a
larger percentage of orders. For example, the Exchange recently filed a
rule proposal with the Commission to remove rule language which
prevented orders being entered by one customer in intervals less than
thirty seconds.\5\ The concern in that filing centered on the potential
for rapid-fire orders overwhelming the BSE specialists. However, the
BSE has addressed that concern through systemic enhancements which,
according to ILA rules, automatically cancel an ILA order if it cannot
be immediately executed. Accordingly, because systemic enhancements
have obviated the need for such a restriction, the Exchange sought to
abolish the limitation.
---------------------------------------------------------------------------
\5\ See Securities Exchange Act Release No. 51031 (January 12,
2005), 70 FR 3404 (January 24, 2005) (SR-BSE-2004-46).
---------------------------------------------------------------------------
Similarly, in the present proposal, systemic enhancements have made
the 1000 share limitation unnecessary. The Exchange's BEACON trading
system is able to respond to orders of all sizes equally and there is
no need for a size limitation. Accordingly, the BSE and its specialists
seek to encourage more customers to utilize ILA, and thereby have their
orders, regardless of size, instantly executed.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of Section 6(b) of the Act \6\ in general, and Section
6(b)(5) \7\ in particular, in that it is designed to promote just and
equitable principles of trade, to remove impediments to and perfect the
mechanism of a free and open market and a national market system, and
is not designed to permit unfair discrimination between customers,
brokers, or dealers, or to regulate by virtue of any authority matters
not related to the administration of the Exchange.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78f(b).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
The Exchange has neither solicited nor received comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has designated the proposed rule change as one that:
(1) Does not significantly affect the protection of investors or the
public interest; (2) does not impose any significant burden on
competition; and (3) does not become operative for 30 days from the
date of filing, or such shorter time as the Commission may designate if
consistent with the protection of investors and the public interest
pursuant to Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) \9\
thereunder.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78s(b)(3)(a).
\9\ 17 CFR 240.19b-4(f)(6).
---------------------------------------------------------------------------
The Commission, consistent with the protection of investors and the
public interest, has determined to make the proposed rule change
effective as of the
[[Page 5260]]
date of this order.\10\ The Commission believes that the proposal could
provide investors with orders larger than 1000 shares with more
efficient and orderly executions.
---------------------------------------------------------------------------
\10\ For purposes only of waiving the 30-day operative period,
the Commission has considered the rule's impact on efficiency,
competition and capital formation. 15 U.S.C. 78c(f).
---------------------------------------------------------------------------
At any time within 60 days of the filing of the proposed rule
change, the Commission may summarily abrogate the proposed rule change
if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send E-mail to rule-comments@sec.gov. Please include File
Number SR-BSE-2005-02 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-BSE-2005-02. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the submission, all subsequent amendments,
all written statements with respect to the proposed rule change that
are filed with the Commission, and all written communications relating
to the proposed rule change between the Commission and any person,
other than those that may be withheld from the public in accordance
with the provisions of 5 U.S.C. 552, will be available for inspection
and copying in the Commission's Public Reference Room. Copies of such
filing also will be available for inspection and copying at the
principal office of the BSE. All comments received will be posted
without change; the Commission does not edit personal identifying
information from submissions. You should submit only information that
you wish to make available publicly. All submissions should refer to
File Number SR-BSE-2005-02 and should be submitted on or before
February 22, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
---------------------------------------------------------------------------
\11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-359 Filed 1-31-05; 8:45 am]
BILLING CODE 8010-01-U
