Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto to Extend the Effective Date of a Previous Rule Change Relating to Information Contained in a Directed Order on the Boston Options Exchange, 38913-38914 [E6-10721]
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[Federal Register Volume 71, Number 131 (Monday, July 10, 2006)] [Notices] [Pages 38913-38914] From the Federal Register Online via the Government Printing Office [www.gpo.gov] [FR Doc No: E6-10721] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-54082; File No. SR-BSE-2006-29] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto to Extend the Effective Date of a Previous Rule Change Relating to Information Contained in a Directed Order on the Boston Options Exchange June 30, 2006. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on June 20, 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 and II below, which Items have been prepared by the BSE. The BSE 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 proposed rule change effective upon filing with the Commission. On June 29, 2006, the BSE filed Amendment No. 1 to the proposed rule change.\5\ The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons. --------------------------------------------------------------------------- \1\ 5 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). \5\ In Amendment No. 1, BSE submitted rule text that indicates that the proposed rule change will expire on September 30, 2006. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change On March 17, 2006, the Exchange filed a proposed rule change to amend its rules governing its Directed Order process on Boston Stock Exchange, Inc. (``BOX'') pursuant to section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder, which rendered the proposal immediately effective upon filing with the Commission.\6\ The rules were amended to clearly state that the BOX Trading Host identifies to an Executing Participant (``EP'') the identity of the firm entering a Directed Order. The amended rule was to be effective until June 30, 2006, while the Commission considered a corresponding Exchange proposal, SR-BSE- 2005-52,\7\ to amend the BOX rules on a permanent basis to permit EPs to choose the firms from whom they will accept Directed Orders, while providing complete anonymity of the firm entering a Directed Order.\8\ --------------------------------------------------------------------------- \6\ See Securities Exchange Act Release No. 53516 (March 20, 2006), 71 FR 15232 (March 27, 2006) (SR-BSE-2006-14). At the Exchange's request, the Commission edited language in this filing to clarify that the Commission did not approve SR-BSE-2006-14, but that SR-BSE-2006-14 became immediately effective upon filing with the Commission pursuant to Section 19(b)(3)(A) of the Act and Rule 19b- 4(f)(6) thereunder. Telephone conference between Jan Woo, Attorney, Division of Market Regulation, Commission, and Brian Donnelly, Assistant Vice President of Regulation and Compliance, BSE, on June 27, 2006 (``Telephone conference''). \7\ See Securities Exchange Act Release No. 53357 (February 23, 2006), 71 FR 10730 (March 2, 2006) (Notice of filing of Amendments No. 2, 3, and 4 to proposed rule change to modify the information contained in a Directed Order on the BOX). \8\ In the event that the issue of anonymity in the Directed Order process is not resolved by September 30, 2006, the Exchange intends to submit another filing under Rule 19b-4(f)(6) under the Act extending this rule and system process. --------------------------------------------------------------------------- The Exchange now proposes to extend the effective date of the amended rule governing the anonymity of its Directed Order process on the BOX from June 30, 2006 to September 30, 2006 while the Commission continues to consider SR-BSE-2005-52 which would amend the BOX rules on a permanent basis to permit EPs to choose the firms from whom they will accept Directed Orders, while providing complete anonymity of the firm entering a Directed Order. In the event the Commission reaches a decision with respect to SR-BSE-2005-52 to amend the BOX rules before September 30, 2006, the amended rule governing the Exchange's Directed Order process on the BOX will cease to be effective at the time of that decision. This rule filing proposes to extend the effective date of the amended rule governing the Exchange's Directed Order process on the BOX from June 30, 2006 to September 30, 2006. 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 BSE 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 BSE 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 March 17, 2006 the BSE filed SR-BSE-2006-14, a proposed rule change seeking to amend the BOX rules to clearly state that the BOX Trading Host identifies to an EP the identity of the firm entering a Directed Order. That proposed rule change became immediately effective upon filing with the Commission pursuant to Rule 19b-4(f)(6) under the Act.\9\ The rule change was to be effective until June 30, 2006, while the Commission considered a corresponding Exchange proposal, SR-BSE- 2006-52, to amend the BOX rules on a permanent basis to permit EPs to choose the firms from whom they will accept Directed Orders while providing complete anonymity of the firm entering a Directed Order. This proposed rule filing seeks to extend the date of effectiveness of the amended Directed Order rule from June 30, 2006 to September 30, 2006, while the [[Page 38914]] Commission considers SR-BSE-2005-52 to amend the BOX rules on a permanent basis to permit EPs to choose the firms from whom they will accept Directed Orders while providing complete anonymity of the firm entering a Directed Order. --------------------------------------------------------------------------- \9\ See footnote 5 supra. Telephone conference. --------------------------------------------------------------------------- 2. Statutory Basis The amended rule is designed to clarify the information contained in a Directed Order. This proposed rule filing seeks to extend the amended rule's effectiveness from June 30, 2006 to September 30, 2006. This extension will afford the Commission the necessary time to consider SR-BSE-2005-52 which would amend the BOX rules on a permanent basis to permit EPs to choose the firms from whom they will accept Directed Orders while providing complete anonymity of the firm entering a Directed Order. Accordingly, the Exchange believes that the proposal is consistent with the requirements of section 6(b) of the Act,\10\ in general, and section 6(b)(5) of the Act,\11\ in particular, in that it is designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transaction in securities, to remove impediments to and perfect the mechanism for a free and open market and a national market system, and, in general, to protect investors and the public interest. --------------------------------------------------------------------------- \10\ U.S.C. 78f(b). \11\ 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 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. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change, as amended: (1) Does not significantly affect the protection of investors or the public interest; (2) does not impose any significant burden on competition; and (3) by its terms does not become operative for 30 days after the date of this filing, or such shorter time as the Commission may designate if consistent with the protection of investors and the public interest, the proposed rule change has become effective pursuant to section 19(b)(3)(A)\12\ of the Act and Rule 19b-4(f)(6) thereunder.\13\ --------------------------------------------------------------------------- \12\ 15 U.S.C. 78s(b)(3)(A). \13\ 17 CFR 240.19b-4(f)(6). --------------------------------------------------------------------------- A proposed rule change filed under Rule 19b-4(f)(6)\14\ normally may not become operative prior to 30 days after the date of filing. However, Rule 19b-4(f)(6)(iii)\15\ permits the Commission to designate a shorter time if such action is consistent with the protection of investors and the public interest. The BSE requests that the Commission waive the 5-day pre-filing notice requirement and the 30-day operative delay, as specified in Rule 19b-4(f)(6)(iii),\16\ which would make the rule change effective and operative upon filing. The Commission believes that waiving the 5-day pre-filing notice and the 30-day operative delay is consistent with the protection of investors and the public interest because such waiver would continue to conform the BOX rules with BOX's current practice and clarify that Directed Orders on BOX are not anonymous.\17\ Accordingly, the Commission designates that the proposed rule change effective and operative upon filing with the Commission. --------------------------------------------------------------------------- \14\ 17 CFR 240.19b-4(f)(6). \15\ 17 CFR 240.19b-4(f)(6)(iii). \16\ 17 CFR 240.19b-4(f)(6)(iii). \17\ For purposes only of waiving the operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such 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.\18\ --------------------------------------------------------------------------- \18\ The effective date of the original proposed rule is June 20, 2006. The effective date of Amendment No. 1 is June 29, 2006. For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under Section 19(b)(3)(C) of the Act, the Commission considers the period to commence on June 29, 2006, the date on which the BSE submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C). --------------------------------------------------------------------------- IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the amended proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse 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-2006-29 on the subject line. Paper Comments Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, Station Place, 100 F Street, NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BSE-2006-29. 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-2006-29 and should be submitted on or before July 31, 2006. --------------------------------------------------------------------------- \19\ 17 CFR 200.30-3(a)(12). For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\19\ Nancy M. Morris, Secretary. [FR Doc. E6-10721 Filed 7-7-06; 8:45 am] BILLING CODE 8010-01-P
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