Self-Regulatory Organizations; Order Approving Proposed Rule Change By the Boston Stock Exchange, Inc. Relating to Remote Floor Brokers, 22934-22935 [E5-2120]
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22934
Federal Register / Vol. 70, No. 84 / Tuesday, May 3, 2005 / Notices
existing rules governing the trading of
equity securities.15
The Commission further believes that
the proposal is consistent with Section
11A(a)(1)(C)(iii) of the Act,16 which sets
forth Congress’s finding that it is in the
IV. Commission’s Findings and Order
public interest and appropriate for the
Granting Accelerated Approval of
protection of investors and the
Proposed Rule Change
maintenance of fair and orderly markets
to assure the availability to brokers,
The Commission finds that the
dealers, and investors of information
proposed rule change is consistent with with respect to quotations for and
the requirements of the Act and the
transactions in securities. Quotations for
rules and regulations thereunder
and last sale information regarding FEU
applicable to a national securities
and FEZ are disseminated through the
exchange.9 In particular, the
Consolidated Quotation System.
Commission finds that the proposed
Furthermore, the NYSE disseminates
rule change is consistent with Section
through the facilities of CTA an updated
6(b)(5) of the Act,10 which requires that
IOPV every 15 seconds from 9:30 a.m.
an exchange have rules designed, among to 4:15 p.m. e.t. The Exchange has
other things, to promote just and
represented that, if the IOPV is not
equitable principles of trade, to remove
calculated on a periodic basis or ceases
impediments to and perfect the
to be widely disseminated, it would
mechanism of a free and open market
cease trading shares of these ETFs.
The Commission notes that, if FEU or
and a national market system, and in
FEZ should be delisted by the NYSE,
general to protect investors and the
Amex would no longer have authority to
public interest. The Commission
trade the shares of the respective fund
believes that this proposal will benefit
pursuant to this order.
investors by increasing competition
In support of this proposal, the
among markets that trade FEU and FEZ.
Exchange has made the following
In addition, the Commission finds
representations:
that the proposal is consistent with
1. Amex surveillance procedures are
Section 12(f) of the Act,11 which permits adequate to properly monitor the
an exchange to trade, pursuant to UTP,
trading of FEU and FEZ shares on the
a security that is listed and registered on Exchange.
12 The Commission
another exchange.
2. Amex will distribute an
notes that it previously approved the
information circular to its members
listing and trading of FEU and FEZ on
prior to the commencement of trading of
the NYSE.13 The Commission also finds FEU and FEZ shares on the Exchange
that the proposal is consistent with Rule that explains the terms, characteristics,
12f–5 under the Act,14 which provides
and risks of trading such shares.
that an exchange shall not extend UTP
3. Amex will require a member with
to a security unless the exchange has in
a customer that purchases FEU or FEZ
effect a rule or rules providing for
shares on the Exchange to provide that
transactions in the class or type of
customer with a product prospectus and
security to which the exchange extends
will note this prospectus delivery
UTP. Amex has represented that it
requirement in the information circular.
This approval order is conditioned on
meets this requirement because it deems
Amex’s adherence to these
the shares of FEU and FEZ to be an
equity securities, thus rendering trading representations.
The Commission finds good cause for
in such shares subject to the Exchange’s
approving this proposal before the
thirtieth day after the publication of
9 In approving this rule change, the Commission
notice thereof in the Federal Register.
notes that it has considered the proposed rule’s
impact on efficiency, competition, and capital
As noted previously, the Commission
formation. See 15 U.S.C. 78c(f).
previously found that the listing and
10 15 U.S.C. 78f(b)(5).
trading of these ETFs on the NYSE is
11 15 U.S.C. 78l(f).
consistent with the Act.17 The
12 Section 12(a) of the Act, 15 U.S.C. 78l(a),
should submit only information that
you wish to make available publicly. All
submissions should refer to File
Number SR-Amex-2005–034 and should
be submitted on or before May 24, 2005.
generally prohibits a broker-dealer from trading a
security on a national securities exchange unless
the security is registered on that exchange pursuant
to Section 12 of the Act. Section 12(f) of the Act
excludes from this restriction trading in any
security to which an exchange ‘‘extends UTP.’’
When an exchange extends UTP to a security, it
allows its members to trade the security as if it were
listed and registered on the exchange even though
it is not so listed and registered.
13 See supra note 3.
14 7 CFR 240.12f–5.
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15:43 May 02, 2005
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15 The Commission notes that Commentary .04 to
existing Amex Rule 190 will permit a specialist in
FEU or FEZ to create or redeem creation units of
these funds to facilitate the maintenance of a fair
and orderly market. The Commission previously
has found Commentary .04 to Amex Rule 190 to be
consistent with the Act. See Securities Exchange
Act Release No. 36947 (March 8, 1996), 61 FR
10106, 10612 (March 14, 1996).
16 15 U.S.C. 78k–1(a)(1)(C)(iii).
17 See supra note 3.
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Sfmt 4703
Commission presently is not aware of
any issue that would cause it to revisit
that earlier finding or preclude the
trading of these funds on the Exchange
pursuant to UTP. Therefore, accelerating
approval of this proposal should benefit
investors by creating, without undue
delay, additional competition in the
market for these ETFs.
V. Conclusion
It is therefore ordered, pursuant to
section 19(b)(2) of the Act,18 that the
proposed rule change (SR–Amex–2005–
034) is hereby approved on an
accelerated basis.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.19
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–2126 Filed 5–2–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51612; File No. SR–BSE–
2004–24]
Self-Regulatory Organizations; Order
Approving Proposed Rule Change By
the Boston Stock Exchange, Inc.
Relating to Remote Floor Brokers
April 26, 2005.
Introduction
On June 28, 2004, the Boston Stock
Exchange, Inc. (‘‘BSE’’ or ‘‘Exchange’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b–4 thereunder,2 a
proposed rule change to permit Remote
Floor Brokers to conduct their business
from remote locations off of the
Exchange floor. The proposed rule
change was published in the FEDERAL
REGISTER on November 30, 2004.3 No
comments were received on the
proposed rule change. This order
approves the proposed rule change.
The Commission finds that the
proposed rule change is consistent with
the Act and the rules and regulations
thereunder applicable to a national
securities exchange,4 particularly
18 15
U.S.C. 78s(b)(2).
CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 See Securities Exchange Act Release No. 50715
(November 22, 2004), 69 FR 69650.
4 In approving this proposed rule change, the
Commission has considered the proposed rule’s
impact of efficiency, competition, and capital
formation. See 15 U.S.C. 78c(f).
19 17
E:\FR\FM\03MYN1.SGM
03MYN1
Federal Register / Vol. 70, No. 84 / Tuesday, May 3, 2005 / Notices
Section 6(b)(5) of the Act which, among
other things, requires that the rules of a
national securities exchange be
designed to promote just and equitable
principles of trade, to foster cooperation
and coordination with persons engaged
in regulating securities transactions, to
remove impediments to perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.5 The Commission
believes that the proposed rule change
could promote efficiency at the BSE by
reducing the costs associated with
transactions on the Exchange by
allowing brokers to choose the most
efficient and cost-effective way of
conducting their business.
Under the proposed rule change,
Remote Floor Brokers will be governed
by the same general rules that govern
Remote Specialists.6 Specifically,
Remote Floor Brokers will be required
to meet certain minimum requirements
including, but not limited to, their
background, experience, staffing,
training procedures, adequacy of the
floor broker’s confidentiality policies,
its contingency plans for
communication or technology failures,
the adequacy of the floor broker’s offsite facility, performance standards and
minimum capital requirements. Further,
Remote Floor Brokers must comply with
the trading rules that apply to trading on
the BSE floor, including but not limited
to: Chapter II, Section 2, Recording of
Sales; Chapter III, Section 6, Floor
Broker’s Responsibility; Chapter XIV,
Independent Floor Brokers; Chapter
XVII, Members Dealing for Own
Account; and, Chapter XXXIII, Section
2, Order Entry.7 All BSE brokered
orders, including those which would be
handled by a BSE Remote Broker, must
be entered into the BEACON trading
system before being executed by a BSE
specialist.8 Further, the BSE will
maintain communication with its
proposed Remote Brokers via Stentofon,
and dedicated telephone lines so as to
ensure the fulfillment of its regulatory
oversight of remote brokerage units.9
Moreover, as it does with its current
Remote Specialist firms, the Exchange
will conduct both scheduled and
unscheduled compliance inspections of
15 U.S.C. 78f(b)(5).
BSE Rules, Chapter XXXIII, BEACON
Remote; see also Securities Exchange Act Release
No. 43127 (August 8, 2000), 65 FR 49617 (August
14, 2000) (Commission Order approving Remote
Specialists at BSE) (‘‘Remote Specialist Order’’).
7 Letter from John Boese, Vice President, Chief
Regulatory Officer, Exchange, to Kelly M. Riley,
Assistant Director, Division of Market Regulation,
Commission, dated April 11, 2005.
8 Id.
9 Id.
remote brokerage firms. Any regulatory
requirements including trading halts,
trading practices, policies, procedures
or rules requiring floor official
involvement will be coordinated by
Exchange personnel with the remote
brokers through the dedicated telephone
line.10
The proposed rule change should not
alter the duties and obligations of a BSE
Floor Broker in any way, other than the
ability of the Floor Brokers to conduct
their business from locations other than
the BSE floor. In fact, the Commission
notes that the Exchange has represented
that the instant proposed rule change
should have little, if any, impact on the
way that Exchange Floor Brokers
operate since the trading activity on the
BSE floor is conducted exclusively in an
electronic manner.
In the order approving Remote
Specialists, the Commission noted the
ability of the BSE to conduct its
regulatory responsibilities over remote
members, such as conducting market
surveillance, enforcing members’
compliance with BSE rules and the Act,
and coordinating regulatory actions both
on and off the floor. The ability of BSE
to conduct these regulatory activities
over remote floor brokers is critical.
While the Commission is satisfied that
the proposed rule provides an adequate
framework to address these issues,11
BSE must establish and implement a
rigorous surveillance program to ensure
BSE remote members comply with the
federal securities laws and BSE rules
and to ensure BSE’s ability to enforce
such compliance.
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,12 that the
proposed rule change (SR–BSE–2004–
24) is approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–2120 Filed 5–2–05; 8:45 am]
BILLING CODE 8010–01–P
5 See
6 See
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15:43 May 02, 2005
Jkt 205001
10 Id.
11 See generally Remote Specialist Order, supra
note 6, for a complete discussion of this framework.
12 See 15 U.S.C. 78s(b)(2).
13 17 CFR 200.30–3(a)(12).
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22935
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51614; File No. SR–CBOE–
2002–03]
Self-Regulatory Organizations; Notice
of Filing of Proposed Rule Change and
Amendment Nos. 1 and 2 Thereto by
the Chicago Board Options Exchange,
Incorporated Relating to Customer
Portfolio and Cross-Margining
Requirements
April 26, 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 April 15,
2005, the Chicago Board Options
Exchange, Incorporated (‘‘CBOE’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’) Amendment No. 2 3 to
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by the CBOE. The
Exchange submitted this partial
amendment, constituting Amendment
No. 2, pursuant to the request of
Commission staff. Specifically, the
Exchange proposes to amend the
proposed rule (Rule 12.4) to remove
current paragraph (b)(2) under which
any affiliate of a self-clearing member
organization can participate in portfolio
margining, without being subject to the
$5 million equity requirement.4
The CBOE submitted the original
proposed rule change to the
Commission on January 15, 2002
(‘‘Original Proposal’’). The proposed
rule change was published in the
Federal Register on March 29, 2002.5
The Commission received one comment
letter in response to the March 29, 2002
Federal Register notice.6 On April 2,
2004, the Exchange filed Amendment
No. 1 to the proposed rule change.7 The
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Partial Amendment No. 2 (‘‘Amendment No.
2’’).
4 This partial amendment would not exclude
these affiliates from participating in portfolio
margining; rather, it would subject them to the $5
million equity requirement in paragraph (b)(3) of
proposed Rule 12.4 in Amendment No. 2.
5 See Securities Exchange Act Release No. 45630
(March 22, 2002), 67 FR 15263 (March 29, 2002).
6 See E-mail from Mike Ianni, Private Investor to
rule-comments@sec.gov, dated November 7, 2002
(‘‘Ianni E-mail’’).
7 See letter from Richard Lewandowski, Vice
President, Division of Regulatory Services, CBOE, to
Michael A. Macchiaroli, Associate Director,
Division of Market Regulation (‘‘Division’’),
Commission, dated April 1, 2004 (‘‘Amendment No.
1’’). The CBOE proposed Amendment No. 1 to make
corrections or clarifications to the proposed rule, or
to reconcile differences between the proposed rule
2 17
E:\FR\FM\03MYN1.SGM
Continued
03MYN1
]]>Agencies
[Federal Register Volume 70, Number 84 (Tuesday, May 3, 2005)]
[Notices]
[Pages 22934-22935]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2120]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51612; File No. SR-BSE-2004-24]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change By the Boston Stock Exchange, Inc. Relating to Remote Floor
Brokers
April 26, 2005.
Introduction
On June 28, 2004, the Boston Stock Exchange, Inc. (``BSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4
thereunder,\2\ a proposed rule change to permit Remote Floor Brokers to
conduct their business from remote locations off of the Exchange floor.
The proposed rule change was published in the Federal Register on
November 30, 2004.\3\ No comments were received on the proposed rule
change. This order approves the proposed rule change.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 50715 (November 22,
2004), 69 FR 69650.
---------------------------------------------------------------------------
The Commission finds that the proposed rule change is consistent
with the Act and the rules and regulations thereunder applicable to a
national securities exchange,\4\ particularly
[[Page 22935]]
Section 6(b)(5) of the Act which, among other things, requires that the
rules of a national securities exchange be designed to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating securities transactions, to remove
impediments to perfect the mechanism of a free and open market and a
national market system and, in general, to protect investors and the
public interest.\5\ The Commission believes that the proposed rule
change could promote efficiency at the BSE by reducing the costs
associated with transactions on the Exchange by allowing brokers to
choose the most efficient and cost-effective way of conducting their
business.
---------------------------------------------------------------------------
\4\ In approving this proposed rule change, the Commission has
considered the proposed rule's impact of efficiency, competition,
and capital formation. See 15 U.S.C. 78c(f).
\5\ See 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
Under the proposed rule change, Remote Floor Brokers will be
governed by the same general rules that govern Remote Specialists.\6\
Specifically, Remote Floor Brokers will be required to meet certain
minimum requirements including, but not limited to, their background,
experience, staffing, training procedures, adequacy of the floor
broker's confidentiality policies, its contingency plans for
communication or technology failures, the adequacy of the floor
broker's off-site facility, performance standards and minimum capital
requirements. Further, Remote Floor Brokers must comply with the
trading rules that apply to trading on the BSE floor, including but not
limited to: Chapter II, Section 2, Recording of Sales; Chapter III,
Section 6, Floor Broker's Responsibility; Chapter XIV, Independent
Floor Brokers; Chapter XVII, Members Dealing for Own Account; and,
Chapter XXXIII, Section 2, Order Entry.\7\ All BSE brokered orders,
including those which would be handled by a BSE Remote Broker, must be
entered into the BEACON trading system before being executed by a BSE
specialist.\8\ Further, the BSE will maintain communication with its
proposed Remote Brokers via Stentofon, and dedicated telephone lines so
as to ensure the fulfillment of its regulatory oversight of remote
brokerage units.\9\ Moreover, as it does with its current Remote
Specialist firms, the Exchange will conduct both scheduled and
unscheduled compliance inspections of remote brokerage firms. Any
regulatory requirements including trading halts, trading practices,
policies, procedures or rules requiring floor official involvement will
be coordinated by Exchange personnel with the remote brokers through
the dedicated telephone line.\10\
---------------------------------------------------------------------------
\6\ See BSE Rules, Chapter XXXIII, BEACON Remote; see also
Securities Exchange Act Release No. 43127 (August 8, 2000), 65 FR
49617 (August 14, 2000) (Commission Order approving Remote
Specialists at BSE) (``Remote Specialist Order'').
\7\ Letter from John Boese, Vice President, Chief Regulatory
Officer, Exchange, to Kelly M. Riley, Assistant Director, Division
of Market Regulation, Commission, dated April 11, 2005.
\8\ Id.
\9\ Id.
\10\ Id.
---------------------------------------------------------------------------
The proposed rule change should not alter the duties and
obligations of a BSE Floor Broker in any way, other than the ability of
the Floor Brokers to conduct their business from locations other than
the BSE floor. In fact, the Commission notes that the Exchange has
represented that the instant proposed rule change should have little,
if any, impact on the way that Exchange Floor Brokers operate since the
trading activity on the BSE floor is conducted exclusively in an
electronic manner.
In the order approving Remote Specialists, the Commission noted the
ability of the BSE to conduct its regulatory responsibilities over
remote members, such as conducting market surveillance, enforcing
members' compliance with BSE rules and the Act, and coordinating
regulatory actions both on and off the floor. The ability of BSE to
conduct these regulatory activities over remote floor brokers is
critical. While the Commission is satisfied that the proposed rule
provides an adequate framework to address these issues,\11\ BSE must
establish and implement a rigorous surveillance program to ensure BSE
remote members comply with the federal securities laws and BSE rules
and to ensure BSE's ability to enforce such compliance.
---------------------------------------------------------------------------
\11\ See generally Remote Specialist Order, supra note 6, for a
complete discussion of this framework.
---------------------------------------------------------------------------
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\12\ that the proposed rule change (SR-BSE-2004-24) is approved.
---------------------------------------------------------------------------
\12\ See 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
---------------------------------------------------------------------------
\13\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-2120 Filed 5-2-05; 8:45 am]
BILLING CODE 8010-01-P
