Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change to Extend the Linkage Fee Pilot Program, 44706-44707 [E5-4124]

Download as PDF 44706 Federal Register / Vol. 70, No. 148 / Wednesday, August 3, 2005 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–52147; File No. SR–BSE– 2005–28] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change to Extend the Linkage Fee Pilot Program July 28, 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 July 27, 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 and is approving the proposal on an accelerated basis for a pilot period through July 31, 2006. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the fee schedule (‘‘Fee Schedule’’) of the Boston Options Exchange, the options trading facility of the BSE (‘‘BOX’’), to extend until July 31, 2006, the current pilot program applicable to the option intermarket linkage (‘‘Linkage’’) fees and to make some technical changes to the Fee Schedule. The text of the proposed fee schedule is available on the Exchange’s Web site (https:// www.bostonstock.com), at the offices of the Exchange, 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 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. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate jul<14>2003 15:22 Aug 02, 2005 Jkt 205001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange’s fees for Principal (‘‘P’’) and Principal Acting as Agent (‘‘P/A’’) orders 3 executed on BOX currently operate under a pilot program scheduled to expire on July 31, 2005.4 The Exchange proposes to extend the current pilot program for such Linkage fees through July 31, 2006. Currently, because all Linkage Orders received by BOX are for the account of a market maker on another exchange, the Linkage fees that are applicable to P and P/A Orders are the same as fees applicable to market makers on other exchanges that submit orders to BOX outside of the Linkage. The side of a BOX trade opposite an inbound P or P/A Order would be billed normally as any other BOX trade. Also, consistent with the Linkage Plan, no fees will be charged to a party sending a Satisfaction request (‘‘S’’ order) to BOX. Rather, a fee will be charged to the BOX Options Participant that was responsible for the tradethrough that caused the S order to be sent. The Exchange believes that extending the Linkage fee pilot program until July 31, 2006 will give the Exchange and the Commission additional time and opportunity to evaluate the appropriateness of the Linkage fees. 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,5 in general, and furthers the objectives of Section 6(b)(4) of the Act,6 in particular, in that the proposed rule change provides for the equitable allocation of reasonable dues, 3 Under Chapter XII of the BOX Rules, a ‘‘Linkage Order’’ means an Immediate or Cancel order routed through the Linkage. There are three types of Linkage Orders: (i) ‘‘P/A Order,’’ which is an order for the principal account of a Market Maker (or equivalent entity on another Participant Exchange that is authorized to represent Public Customer orders), reflecting the terms of a related unexecuted Public Customer order for which the specialist is acting as agent; (ii) ‘‘P Order,’’ which is an order for the principal account of a market maker (or equivalent entity on another Participant Exchange) and is not a P/A Order; and (iii) ‘‘Satisfaction Order,’’ which is an order sent through the Linkage to notify a Participant Exchange of a Trade-Through and to seek satisfaction of the liability arising from that TradeThrough. 4 See Securities Exchange Act Release No. 50124 (July 30, 2004), 69 FR 47963 (August 6, 2004) (SR– BSE 2004–32). 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(4). PO 00000 Frm 00154 Fmt 4703 Sfmt 4703 fees, and other charges among its members and other persons using its facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act. 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. 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 an e-mail to rulecomments@sec.gov. Please include File Number SR–BSE–2005–28 on the subject line. Paper Comments • Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–9303. All submissions should refer to File Number SR–BSE–2005–28. 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 E:\FR\FM\03AUN1.SGM 03AUN1 Federal Register / Vol. 70, No. 148 / Wednesday, August 3, 2005 / Notices the principal office of the Exchange. 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–2005–28 and should be submitted on or before August 24, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12 Margaret H. McFarland, Deputy Secretary. [FR Doc. E5–4124 Filed 8–2–05; 8:45 am] IV. Commission’s Findings and Order Granting Accelerated Approval of the Proposed Rule Change [Release No. 34–52131; File No. SR-NASD– 2005–093] After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the rules and regulations thereunder applicable to a national securities exchange,7 and, in particular, the requirements of Section 6(b) of the Act 8 and the rules and regulations thereunder. The Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,9 which requires that the rules of the Exchange provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Commission believes that the extension of the Linkage fee pilot until July 31, 2006 will give the Exchange and the Commission further opportunity to evaluate whether such fees are appropriate. The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,10 for approving the proposed rule change prior to the thirtieth day after publication of notice thereof in the Federal Register. The Commission believes that granting accelerated approval of the proposed rule change will preserve the Exchange’s existing pilot program for Linkage fees without interruption as the Exchange and the Commission further consider the appropriateness of Linkage fees. V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (SR–BSE–2005– 28) is hereby approved on an accelerated basis for a pilot period to expire on July 31, 2006. 7 In approving this proposal, the Commission has considered the proposed rule’s impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f). 8 15 U.S.C. 78f(b). 9 15 U.S.C. 78f(b)(4). 10 15 U.S.C. 78s(b)(2). 11 Id. VerDate jul<14>2003 15:22 Aug 02, 2005 Jkt 205001 BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION Self-Regulatory Organizations; National Association of Securities Dealers, Inc; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to NASD Rule 3370 July 27, 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 July 20, 2005, the National Association of Securities Dealers, Inc. (‘‘NASD’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by NASD. NASD has designated the proposed rule change as constituting a ‘‘non-controversial’’ rule change under paragraph (f)(6) of Rule 19b-4 under the Act,3 which renders the proposal effective upon receipt of this filing by the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change NASD is proposing to amend Rule 3370 to clarify that members must make certain affirmative determinations when effecting long sales and document compliance with those affirmative determination requirements. Below is the text of the proposed rule change. Proposed new language is in italics; proposed deletions are in brackets. * * * * * 3370. [Purchases]Prompt Receipt and Delivery of Securities (a) Purchases No member or person associated with a member may accept a customer’s purchase order for any security unless it PO 00000 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 17 CFR 240.19b-4. 1 15 Frm 00155 Fmt 4703 Sfmt 4703 44707 has first ascertained that the customer placing the order or its agent agrees to receive securities against payment in an amount equal to any execution, even though such an execution may represent the purchase of only a part of a larger order. (b) Long Sales No member or person associated with a member shall accept a long sale order from any customer in any equity security unless the order meets the requirements applicable to long sales set forth in Regulation SHO. To the extent a member or person associated with a member does not have physical possession or control of the securities, the member or person associated with a member must document, at the time the order is taken, the communication with the customer as to the present location of the securities in question, whether they are in good deliverable form and the customer’s ability to deliver them to the member by settlement date. For purposes of this rule, the term ‘‘customer’’ includes a non-member broker-dealer. * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD 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 may be examined at the places specified in Item IV below. NASD 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 On June 23, 2004, the SEC adopted certain provisions of a new short sale regulation, designated Regulation SHO.4 Regulation SHO consists of, among other provisions, SEC Rule 200(g), requirements for marking sell order of equity securities, and SEC Rule 203(a), delivery requirements for long sales.5 Specifically, SEC Rule 200(g) of Regulation SHO requires that sell orders in all equity securities be marked either ‘‘long,’’ ‘‘short,’’ or ‘‘short exempt.’’ 4 See Securities Exchange Act Release No. 50103 (July 28, 2004), 69 FR 48008 (August 6, 2004). 5 The compliance date for SEC Rule 200(g) and SEC Rule 203(a) was January 3, 2005. E:\FR\FM\03AUN1.SGM 03AUN1

Agencies

[Federal Register Volume 70, Number 148 (Wednesday, August 3, 2005)]
[Notices]
[Pages 44706-44707]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-4124]



[[Page 44706]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52147; File No. SR-BSE-2005-28]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Order Granting Accelerated Approval of a Proposed 
Rule Change to Extend the Linkage Fee Pilot Program

July 28, 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 July 27, 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 and is approving the 
proposal on an accelerated basis for a pilot period through July 31, 
2006.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the fee schedule (``Fee Schedule'') 
of the Boston Options Exchange, the options trading facility of the BSE 
(``BOX''), to extend until July 31, 2006, the current pilot program 
applicable to the option intermarket linkage (``Linkage'') fees and to 
make some technical changes to the Fee Schedule. The text of the 
proposed fee schedule is available on the Exchange's Web site (https://
www.bostonstock.com), at the offices of the Exchange, 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 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 Exchange's fees for Principal (``P'') and Principal Acting as 
Agent (``P/A'') orders \3\ executed on BOX currently operate under a 
pilot program scheduled to expire on July 31, 2005.\4\ The Exchange 
proposes to extend the current pilot program for such Linkage fees 
through July 31, 2006. Currently, because all Linkage Orders received 
by BOX are for the account of a market maker on another exchange, the 
Linkage fees that are applicable to P and P/A Orders are the same as 
fees applicable to market makers on other exchanges that submit orders 
to BOX outside of the Linkage. The side of a BOX trade opposite an 
inbound P or P/A Order would be billed normally as any other BOX trade. 
Also, consistent with the Linkage Plan, no fees will be charged to a 
party sending a Satisfaction request (``S'' order) to BOX. Rather, a 
fee will be charged to the BOX Options Participant that was responsible 
for the trade-through that caused the S order to be sent.
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    \3\ Under Chapter XII of the BOX Rules, a ``Linkage Order'' 
means an Immediate or Cancel order routed through the Linkage. There 
are three types of Linkage Orders:
    (i) ``P/A Order,'' which is an order for the principal account 
of a Market Maker (or equivalent entity on another Participant 
Exchange that is authorized to represent Public Customer orders), 
reflecting the terms of a related unexecuted Public Customer order 
for which the specialist is acting as agent;
    (ii) ``P Order,'' which is an order for the principal account of 
a market maker (or equivalent entity on another Participant 
Exchange) and is not a P/A Order; and
    (iii) ``Satisfaction Order,'' which is an order sent through the 
Linkage to notify a Participant Exchange of a Trade-Through and to 
seek satisfaction of the liability arising from that Trade-Through.
    \4\ See Securities Exchange Act Release No. 50124 (July 30, 
2004), 69 FR 47963 (August 6, 2004) (SR-BSE 2004-32).
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    The Exchange believes that extending the Linkage fee pilot program 
until July 31, 2006 will give the Exchange and the Commission 
additional time and opportunity to evaluate the appropriateness of the 
Linkage fees.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\5\ in general, and furthers the 
objectives of Section 6(b)(4) of the Act,\6\ in particular, in that the 
proposed rule change provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members and other 
persons using its facilities.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change does not impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act.

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. 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 an e-mail to rule-comments@sec.gov. Please include 
File Number SR-BSE-2005-28 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-BSE-2005-28. 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

[[Page 44707]]

the principal office of the Exchange. 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-2005-28 and should be submitted on 
or before August 24, 2005.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange,\7\ and, in particular, the requirements of Section 6(b) of 
the Act \8\ and the rules and regulations thereunder. The Commission 
finds that the proposed rule change is consistent with Section 6(b)(4) 
of the Act,\9\ which requires that the rules of the Exchange provide 
for the equitable allocation of reasonable dues, fees and other charges 
among its members and other persons using its facilities. The 
Commission believes that the extension of the Linkage fee pilot until 
July 31, 2006 will give the Exchange and the Commission further 
opportunity to evaluate whether such fees are appropriate.
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    \7\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition, and capital 
formation. 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
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    The Commission finds good cause, pursuant to Section 19(b)(2) of 
the Act,\10\ for approving the proposed rule change prior to the 
thirtieth day after publication of notice thereof in the Federal 
Register. The Commission believes that granting accelerated approval of 
the proposed rule change will preserve the Exchange's existing pilot 
program for Linkage fees without interruption as the Exchange and the 
Commission further consider the appropriateness of Linkage fees.
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    \10\ 15 U.S.C. 78s(b)(2).
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V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-BSE-2005-28) is hereby 
approved on an accelerated basis for a pilot period to expire on July 
31, 2006.
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    \11\ Id.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4124 Filed 8-2-05; 8:45 am]
BILLING CODE 8010-01-P
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