Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To Establish Fees Per Contract Traded for Improvement Orders Submitted Into a Price Improvement Period by a Public Customer That Are Not Submitted as Customer PIP Orders, 28058-28059 [E6-7321]

Download as PDF 28058 Federal Register / Vol. 71, No. 93 / Monday, May 15, 2006 / Notices to benefit the public, issuers, and the listing markets. It is therefore ordered, pursuant to Section 19(b)(2) of the Act, that the proposed rule change, as amended (SR– Amex–2005–125), be and hereby is approved. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.6 Nancy M. Morris, Secretary. [FR Doc. E6–7324 Filed 5–12–06; 8:45 am] [Release No. 34–53774; File No. SR–BSE– 2006–10] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change To Establish Fees Per Contract Traded for Improvement Orders Submitted Into a Price Improvement Period by a Public Customer That Are Not Submitted as Customer PIP Orders May 9, 2006. 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 March 6, 2006, 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, II, and III below, which items have been prepared substantially by the BSE. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend the Fee Schedule of the Boston Options Exchange (‘‘BOX’’) to establish fees per contract traded for Improvement Orders,3 submitted into a Price Improvement Period (‘‘PIP’’) by a Public Customer 4 that are not submitted as Customer PIP Orders (‘‘CPO’s’’). The BOX Fee Schedule is available on the BOX Web site at: www.bostonoptions.com. The text of the jlentini on PROD1PC65 with NOTICES CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 The term ‘‘Improvement Orders’’ is defined in the BOX Rules Chapter V, Section 18(e)(i). 4 ‘‘Public Customer’’ means a person that is not a broker or dealer in securities. BOX Rules Chapter I, Section 1(a)(50). VerDate Aug<31>2005 16:54 May 12, 2006 Jkt 208001 Fee Schedule Sec. 1 Trading Fees for Public Customer Accounts II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change SECURITIES AND EXCHANGE COMMISSION 1 15 Boston Options Exchange Facility [None] $0.20 per contract traded for Improvement Orders submitted into a Price Improvement Period (‘‘PIP’’) by a Public Customer, that are not submitted as Customer PIP Orders (‘‘CPO’s’’). * * * * * BILLING CODE 8010–01–P 6 17 proposed rule change is provided below, with additions italicized and deletions in [brackets]. In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change as amended 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. 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 Currently, there are two ways Public Customer Orders can be submitted into a PIP auction as an Improvement Order. The first way is a CPO, which is an order a Public Customer provides to her/his BOX Order Flow Provider (‘‘OFP’’) that contains a standard limit order price in a nickel increment and the CPO PIP Reference Price 5 in a penny increment. The premise of a CPO order is for a Public Customer to provide a standard limit order price to be submitted to the BOX book, and the additional penny auction limit price to be submitted into a PIP auction should one occur while her/his limit order is on the BOX book. The CPO PIP Reference Price provided by the Public Customer to OFP allows the Public Customer to participate in PIP auction by the OFP submitting Improvement Orders on her/ his behalf up to the CPO PIP Reference Price. The CPO order allows the average investor to participate in penny price PIP auctions when she/he already has an order on the BOX book for that particular series. 5 The term ‘‘CPO Reference Price’’ is defined in BOX Rules Chapter V, Section 18(g)(i). PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 The second way a Public Customer Order can be submitted into a PIP auction as an Improvement Order is by submitting instructions to an OFP to submit an Improvement Order on her/ his behalf under any instructions the OFP wishes to accept. These Public Customer Improvement Orders that are not submitted as CPO’s do not have a limit order on the BOX book coupled with their Improvement Order. These Improvement Orders are being submitted in reaction to the PIP auction broadcast.6 A Public Customer receiving and reacting to the PIP broadcast needs highly developed technology similar to the technology used by BOX OFPs and Market Makers, which is not readily available to the average investor. This technology is necessary for the Public Customer to receive significant amounts of data at an extremely high rate of speed and to react to the PIP broadcast, within the time frame of the threesecond PIP auction. Typically, a Public Customer who can receive a PIP broadcast and react to it by submitting an Improvement Order would be a sophisticated investor possessing the aforementioned technology. The sophisticated Public Customer investor’s possession of the technology, similar to BOX OFPs and Market Makers, allows this Public Customer to compete in PIPs on the same level playing field as OFPs and Market Makers. The BOX proposes to charge a $0.20 per contract traded fee for Improvement Orders submitted into a PIP by a Public Customer that are not submitted as CPO’s. The BOX believes this fee is reasonable because these orders are submitted into a PIP auction, which is a special trading mechanism within the BOX Trading Host that utilizes the PIP broadcast to create these orders. The BOX believes it is fair that customers behaving as ‘‘options professionals’’ should be subject to the same trading fees in the interests of a level playing field. The BOX is not proposing to charge a fee for Public Customer Improvement Orders, which are submitted as CPO’s. All other Public Customer Orders traded on BOX, including marketable orders, which interact with a PIP already underway, will continue to be free. 6 The PIP broadcast is disseminated once a PIP is initiated and is distributed solely to BOX Options Participants. The broadcasting of this message advises the Options Participants: (1) That a Primary Improvement Order, as that term is defined in the BOX Rules Chapter V, Section 18(e), has been processed; (2) of information concerning series, size, price and side of market, and; (3) when the PIP will conclude (‘‘PIP Broadcast’’). E:\FR\FM\15MYN1.SGM 15MYN1 Federal Register / Vol. 71, No. 93 / Monday, May 15, 2006 / Notices 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,7 in general, and Section 6(b)(4) of the Act,8 in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities. B. Self-Regulatory Organization’s Statement on Burden on Competition The Exchange believes that the proposed rule change would 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 not solicited or received comments on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: (A) By order approve such proposed rule change; or (B) Institute proceedings to determine whether the proposed rule change should be disapproved. IV. Solicitation of Comments For the Commission, by the Division of Market Regulation, pursuant to delegated authority.9 Nancy M. Morris, Secretary. [FR Doc. E6–7321 Filed 5–12–06; 8:45 am] BILLING CODE 8010–01–P 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 No. SR–BSE–2006–10 on the subject line. jlentini on PROD1PC65 with NOTICES Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549–1090. All submissions should refer to File Number SR–BSE–2006–10. 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 Commissions 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 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–2006–10 and should be submitted by June 5, 2006. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, SECURITIES AND EXCHANGE COMMISSION [Release No. 34–53777; File No. SR–NYSE– 2006–27] Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Extension of the Pilot Program Amending Listed Company Manual Section 102.01A May 9, 2006. notice is hereby given that on May 2, 2006, the New York Stock Exchange, Inc. (‘‘Exchange’’ or ‘‘NYSE’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I, II and III below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A) of the Act 3 and Rule 19b–4(f)(6) thereunder,4 which renders the proposal effective upon filing with 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 The Exchange has amended on a six month pilot program basis (‘‘Pilot Program’’) Section 102.01A of the Exchange’s Listed Company Manual (‘‘Manual’’) regarding minimum numerical standards. The Pilot Program is due to expire on May 31, 2006. The Exchange proposes to extend the Pilot Program until the earlier of: (i) August 31, 2006; or (ii) the approval by the Commission of the Exchange’s proposed permanent amendment to Section 102.01A which the Exchange filed with the Commission on March 20, 2006. The text of the proposed rule changes is available on the Exchange’s Web site (https://www.nyse.com), at the Exchange’s 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 received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 9 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 7 15 U.S.C. 78f(b). 8 15 U.S.C. 78f(b)(4). VerDate Aug<31>2005 16:54 May 12, 2006 3 15 1 15 Jkt 208001 PO 00000 Frm 00074 Fmt 4703 4 47 Sfmt 4703 28059 U.S.C. 78s(b)(3)(A). CFR 240.19b–4(f)(6). E:\FR\FM\15MYN1.SGM 15MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 71, Number 93 (Monday, May 15, 2006)]
[Notices]
[Pages 28058-28059]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-7321]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53774; File No. SR-BSE-2006-10]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change To Establish Fees Per Contract 
Traded for Improvement Orders Submitted Into a Price Improvement Period 
by a Public Customer That Are Not Submitted as Customer PIP Orders

May 9, 2006.
    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 March 6, 2006, 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, II, 
and III below, which items have been prepared substantially by the BSE. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change, as amended, from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Fee Schedule of the Boston 
Options Exchange (``BOX'') to establish fees per contract traded for 
Improvement Orders,\3\ submitted into a Price Improvement Period 
(``PIP'') by a Public Customer \4\ that are not submitted as Customer 
PIP Orders (``CPO's'').
---------------------------------------------------------------------------

    \3\ The term ``Improvement Orders'' is defined in the BOX Rules 
Chapter V, Section 18(e)(i).
    \4\ ``Public Customer'' means a person that is not a broker or 
dealer in securities. BOX Rules Chapter I, Section 1(a)(50).
---------------------------------------------------------------------------

    The BOX Fee Schedule is available on the BOX Web site at: 
www.bostonoptions.com. The text of the proposed rule change is provided 
below, with additions italicized and deletions in [brackets].
Boston Options Exchange Facility
    Fee Schedule
Sec. 1 Trading Fees for Public Customer Accounts
    [None] $0.20 per contract traded for Improvement Orders submitted 
into a Price Improvement Period (``PIP'') by a Public Customer, that 
are not submitted as Customer PIP Orders (``CPO's'').
* * * * *

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 as 
amended 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. 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
    Currently, there are two ways Public Customer Orders can be 
submitted into a PIP auction as an Improvement Order. The first way is 
a CPO, which is an order a Public Customer provides to her/his BOX 
Order Flow Provider (``OFP'') that contains a standard limit order 
price in a nickel increment and the CPO PIP Reference Price \5\ in a 
penny increment. The premise of a CPO order is for a Public Customer to 
provide a standard limit order price to be submitted to the BOX book, 
and the additional penny auction limit price to be submitted into a PIP 
auction should one occur while her/his limit order is on the BOX book. 
The CPO PIP Reference Price provided by the Public Customer to OFP 
allows the Public Customer to participate in PIP auction by the OFP 
submitting Improvement Orders on her/his behalf up to the CPO PIP 
Reference Price. The CPO order allows the average investor to 
participate in penny price PIP auctions when she/he already has an 
order on the BOX book for that particular series.
---------------------------------------------------------------------------

    \5\ The term ``CPO Reference Price'' is defined in BOX Rules 
Chapter V, Section 18(g)(i).
---------------------------------------------------------------------------

    The second way a Public Customer Order can be submitted into a PIP 
auction as an Improvement Order is by submitting instructions to an OFP 
to submit an Improvement Order on her/his behalf under any instructions 
the OFP wishes to accept. These Public Customer Improvement Orders that 
are not submitted as CPO's do not have a limit order on the BOX book 
coupled with their Improvement Order. These Improvement Orders are 
being submitted in reaction to the PIP auction broadcast.\6\
---------------------------------------------------------------------------

    \6\ The PIP broadcast is disseminated once a PIP is initiated 
and is distributed solely to BOX Options Participants. The 
broadcasting of this message advises the Options Participants: (1) 
That a Primary Improvement Order, as that term is defined in the BOX 
Rules Chapter V, Section 18(e), has been processed; (2) of 
information concerning series, size, price and side of market, and; 
(3) when the PIP will conclude (``PIP Broadcast'').
---------------------------------------------------------------------------

    A Public Customer receiving and reacting to the PIP broadcast needs 
highly developed technology similar to the technology used by BOX OFPs 
and Market Makers, which is not readily available to the average 
investor. This technology is necessary for the Public Customer to 
receive significant amounts of data at an extremely high rate of speed 
and to react to the PIP broadcast, within the time frame of the three-
second PIP auction. Typically, a Public Customer who can receive a PIP 
broadcast and react to it by submitting an Improvement Order would be a 
sophisticated investor possessing the aforementioned technology. The 
sophisticated Public Customer investor's possession of the technology, 
similar to BOX OFPs and Market Makers, allows this Public Customer to 
compete in PIPs on the same level playing field as OFPs and Market 
Makers.
    The BOX proposes to charge a $0.20 per contract traded fee for 
Improvement Orders submitted into a PIP by a Public Customer that are 
not submitted as CPO's. The BOX believes this fee is reasonable because 
these orders are submitted into a PIP auction, which is a special 
trading mechanism within the BOX Trading Host that utilizes the PIP 
broadcast to create these orders. The BOX believes it is fair that 
customers behaving as ``options professionals'' should be subject to 
the same trading fees in the interests of a level playing field. The 
BOX is not proposing to charge a fee for Public Customer Improvement 
Orders, which are submitted as CPO's. All other Public Customer Orders 
traded on BOX, including marketable orders, which interact with a PIP 
already underway, will continue to be free.

[[Page 28059]]

2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\7\ in general, and Section 
6(b)(4) of the Act,\8\ in particular, in that it is designed to provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and issuers and other persons using its 
facilities.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change would 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 not solicited or received comments on the proposed 
rule change.

III. Date of Effectiveness of the Proposed Rule

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change; or
    (B) Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 an e-mail to rule-comments@sec.gov. Please include 
File No. SR-BSE-2006-10 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE, 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-BSE-2006-10. 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 Commissions 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 
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-2006-10 
and should be submitted by June 5, 2006.
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Nancy M. Morris,
Secretary.
 [FR Doc. E6-7321 Filed 5-12-06; 8:45 am]
BILLING CODE 8010-01-P

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