Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change Amending Rules To Require Securities Become Eligible for a Direct Registration System, 71000-71002 [E6-20730]
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Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54844; File No. SR–Amex–
2006–88]
Self-Regulatory Organizations;
American Stock Exchange LLC; Order
Approving Proposed Rule Change To
Extend the Term of Index-Linked
Securities
November 30, 2006.
On September 20, 2006, the American
Stock Exchange LLC (‘‘Amex’’ or
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘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
amend Section 107D(b) of the Amex
Company Guide 3 to extend the
maximum duration of index-linked
securities (‘‘Index-Linked Securities’’)
from ten (10) years to thirty (30) years.
The proposed rule change was
published for comment in the Federal
Register on October 27, 2006.4 The
Commission received no comment
letters on the proposal.
Section 107D of the Amex Company
Guide currently sets forth eleven criteria
that the issue and the issuer must meet
in order to list and trade Index-Linked
Securities pursuant to the generic listing
standards.5 One of the criteria the
Exchange considers for the listing and
trading of Index-Linked Securities
pursuant to 107D is that the term of the
issue must be a minimum term of one
year but not greater than ten years.
Proposed Section 107D(b) would extend
the duration of the term of the issue
from ten years to thirty years.
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.6 In particular, the
Commission finds that the proposed
rule change is consistent with Section
6(b)(5) of the Act,7 which requires,
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Section 107D provides for the listing and trading
of Index-Linked Securities pursuant to Rule 19b–
4(e) under the Act (the ‘‘generic listing standards’’).
4 See Securities Exchange Act Release No. 54629
(October 19, 2006), 71 FR 63056.
5 The Exchange may submit a rule filing pursuant
to Section 19(b)(2) of the Act to permit the listing
and trading of index linked securities that do not
otherwise meet the generic listing criteria set forth
in Section 107D.
6 In approving the proposed rule change, the
Commission notes that it has considered the
proposed rule’s impact on efficiency, competition
and capital formation. 15 U.S.C. 78c(f).
7 15 U.S.C. 78f(b)(5).
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among other things, that Exchange rules
be designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
facilitating transactions in securities,
and to remove impediments to and
perfect the mechanism of a free and
open market and a national market
system. Amending Section 107D should
provide the Exchange with more
flexibility in responding to the
increased demand from issuers to list
and trade Index-Linked Securities that
are greater than ten years in duration.
The Commission notes that corporate
bonds and other fixed-income products
historically have been issued with terms
of up to, or greater than, thirty years.8
In addition, the Commission has
approved amendments to the generic
listing standards for equity-linked notes
that removed the maximum term limits
for those securities.9
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,10 that the
proposed rule change (SR–Amex–2006–
88) be, and hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Nancy M. Morris,
Secretary.
[FR Doc. E6–20762 Filed 12–6–06; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54832; File No. SR–BSE–
2006–46]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
of Proposed Rule Change Amending
Rules To Require Securities Become
Eligible for a Direct Registration
System
November 29, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 notice is hereby given that on
October 26, 2006, the Boston Stock
Exchange, Inc. (‘‘BSE’’) filed with the
Securities and Exchange Commission
8 See also Section 104 of the Amex Company
Guide setting forth the standards for listing debt
securities.
9 See Securities Exchange Act Release No. 42110
(November 5, 1999), 64 FR 61677 (November 12,
1999) (SR–Amex–9–33); 41992 (October 7, 1999), 64
FR 56007 (October 15, 1999) (SR–NYSE–99–22);
42313 (January 4, 2000), 65 FR 2205 (January 13,
2000) (SR–CHX–99–19).
10 15 U.S.C. 78f(b)(5).
11 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
PO 00000
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(‘‘Commission’’) the proposed rule
change described in Items I, II, and III
below, which items have been prepared
primarily by BSE. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested parties.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
BSE proposes to amend its rules to
require securities of all listed companies
become eligible to participate in a Direct
Registration System (‘‘DRS’’)
administered by a clearing agency
registered under Section 17A of the Act.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, 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. BSE has prepared
summaries, set forth in sections (A), (B),
and (C) below, of the most significant
aspects of these statements.2
(A) Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
(1) Purpose
DRS, as administered by The
Depository Trust Company (‘‘DTC’’), is
an electronic system that allows an
investor to establish either through the
issuer’s transfer agent or through the
investor’s broker-dealer a book-entry
position on the books of the issuer and
to electronically transfer her position
between the transfer agent and the
broker-dealer.3 DRS, therefore, allows
an investor to have securities registered
in her name without having a certificate
issued to her and to electronically
transfer, thereby eliminating the risk
and delays associated with the use of
certificates, her securities to her brokerdealer in order to effect a transaction.
Ownership is recorded in book-entry
form, and instead of receiving a physical
2 The Commission has modified portions of the
text of the summaries prepared by BSE.
3 Currently, the only registered clearing agency
operating a DRS is DTC. For a description of DRS
and the DRS facilities administered by DTC, see
Securities Exchange Act Release Nos. 37931
(November 7, 1996), 61 FR 58600 (November 15,
1996), [File No. SR–DTC–96–15] (order granting
approval to establish DRS) and 41862 (September
10, 1999), 64 FR 51162 (September 21, 1999), [File
No. SR–DTC–99–16] (order approving
implementation of the Profile Modification System).
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Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices
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certificate from the issuer or its transfer
agent, the investor receives a statement
of holdings as evidence of ownership.
BSE believes that DRS will be an
important step in reducing the use of
securities certificates, which should
facilitate transfers in securities and
could eventually lead to lower risks and
costs for issuers and investors.4 To
encourage the use of DRS, the BSE
proposes to require that all listed
securities be eligible to participate in
DRS. Under the proposed rule change,
BSE would add Section 3 to Chapter
XXVII that would require any security
initially listing on BSE on or after
January 1, 2007, to be eligible for a DRS
that is operated by a clearing agency
registered under Section 17A of the Act.
This requirement, however, would not
extend to (i) securities of companies
which already have securities listed on
BSE, (ii) securities of companies which
immediately prior to such listing had
securities listed on another securities
exchange in the U.S., or (iii) non-equity
securities which are book-entry only.
Under the proposed rule, on and after
January 1, 2008, all securities listed on
BSE, other than non-equity securities
which are book-entry only, must be
eligible for a DRS that is operated by a
clearing agency registered under Section
17A of the Act.5 While this proposal
would require that securities be DRS
eligible, it would not mandate the
elimination of securities certificates
and, subject to applicable state law and
the company’s governing documents, an
investor could still elect to receive a
securities certificate if an issuer elects to
issue securities certificates.
In order for a security to be eligible for
the only DRS in operation today, the
issuer is required to use a transfer agent
that meets certain insurance and
connectivity requirements.6 As a result,
4 In that regard, in March 2004 the Commission
published a concept release that discussed, among
other things, whether more should be done to
reduce the use of physical securities certificates by
individual investors. The Commission noted that
the use of physical certificates increases the costs
and risks of clearing and settling securities
transactions, costs that most often are ultimately
borne by investors. Securities Exchange Act Release
No. 8398 (March 11, 2004), 69 FR 12922 (March 18,
2004). Issuers may save money by not having to
print or process physical certificates but may incur
other ongoing expenses to maintain book-entry
records, such as mailing statements to shareholders.
5 The exact text of the BSE’s proposed rule change
is set forth in its filing, which can be found at
https://www.bostonstock.com/legal/
pending_rule_filings.html.
6 DTC’s rules require that a transfer agent
(including an issuer acting as its own transfer agent)
acting for a company issuing securities in DRS must
be a DRS Limited Participant. Securities Exchange
Act Release No. 37931 (November 7, 1996), 61 FR
58600 (November 15, 1996), [File No. SR–DTC–96–
15].
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some transfer agents may have to make
changes to comply with their
requirements. In addition, certain
issuers may have to make amendments
to their governing documents, such as
their by-laws or corporate charters, to be
eligible to issue book-entry positions. To
allow sufficient time for these changes,
BSE proposes implementing the
proposed requirement on January 1,
2008, for issuers with securities already
listed on BSE or another listed
marketplace when the rule is approved.
Companies listing for the first time
would have greater flexibility to adopt
any required changes and therefore the
proposed requirement would be
applicable to new listings beginning
January 1, 2007.
(2) Statutory Basis
The statutory basis under the Act for
this proposed rule change is the
requirement under Section 6(b)(5) of the
Act, which requires, among other
things, that the rules of an exchange are
designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, to foster cooperation and
coordination with persons engaged in
regulating, clearing, settling, processing
information with respect to, and
facilitating transactions in securities, 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.7 BSE believes that the
proposed rule is consistent with its
obligations under Section 6(b)(5)
because requiring securities to be
eligible to use DRS should increase the
trading of securities in held book-entry
forms, which should in turn facilitate
the processing of securities transactions.
(B) Self-Regulatory Organization’s
Statement on Burden on Competition
BSE 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
BSE has neither solicited nor received
written comments on the proposed rule
change.
7 15
PO 00000
U.S.C. 78f(b)(5).
Frm 00056
Fmt 4703
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71001
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within thirty-five 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 ninety 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 rulecomments@sec.gov. Please include File
Number SR–BSE–2006–46 in 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–2006–46. 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
Section, 100 F Street, NE., Washington,
DC 20549. Copies of such filings also
will be available for inspection and
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Federal Register / Vol. 71, No. 235 / Thursday, December 7, 2006 / Notices
copying at the principal office of BSE
and on BSE’s Web site, www.bse.com.
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–2006–46 and should
be submitted on or before December 28,
2006.
For the Commission by the Division of
Market Regulation, pursuant to delegated
authority.8
Nancy M. Morris,
Secretary.
[FR Doc. E6–20730 Filed 12–6–06; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54842; File No. SR–CHX–
2006–35]
Self-Regulatory Organizations;
Chicago Stock Exchange, Inc.; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change Relating to
Participant Fees and Credits
November 30, 2006.
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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 November
13, 2006, the Chicago Stock Exchange,
Inc. (‘‘CHX’’ 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 by the CHX. The
CHX has designated this proposal as one
establishing or changing a member due,
fee, or other charge imposed by the CHX
pursuant to Section 19(b)(3)(A)(ii) of the
Act,3 and Rule 19b–4(f)(2) 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 CHX proposes to amend its
Schedule of Participant Fees and Credits
(the ‘‘Fee Schedule’’) to include a
reduction in the fees charged for orders
routed through the NMS Linkage Plan to
8 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
1 15
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The NASDAQ Stock Market, Inc.
(‘‘Nasdaq’’). The text of this proposed
rule change is available on the
Exchange’s Web site at https://
www.chx.com/rules/proposed_rules.htm
and in 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
CHX 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 CHX 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 Fee Schedule, among
other things, identifies the fees that are
charged to participants on account of
outbound NMS Linkage Plan orders.5
Section E.6 of the Fee Schedule applies
to orders that are Matching Systemeligible and therefore are routed from
the Matching System to other market
centers. Section E.8 of the Fee Schedule
applies to orders that have not yet
migrated to the Matching System and
therefore are routed from the Exchange’s
pre-new trading model facilities.6
When an outbound NMS Linkage Plan
order is executed on another NMS
Linkage participant market, that market
will directly invoice the CHX for a
transaction fee, in an amount that may
not exceed the transaction fee that it
would charge its own member for such
an execution. The CHX is then
responsible for payment of such invoice.
Sections E.6 and E.8 of the Fee Schedule
permit the CHX to collect a
corresponding fee from the CHX
participant that generated the outbound
NMS Linkage Plan order. The CHX
believes that it is appropriate to
establish outbound NMS Linkage fee
5 See Securities Exchange Act Release No. 54548
(September 29, 2006), 71 FR 59159 (October 6,
2006) (SR–CHX–2006–28) (approving NMS Linkage
Plan exchange-to-exchange billing procedures);
Securities Exchange Act Release No. 54551
(September 29, 2006), 71 FR 59148 (October 6,
2006) (approving NMS Linkage Plan).
6 See Securities Exchange Act Release No. 54550
(September 29, 2006); 71 FR 59563 (October 10,
2006) (SR–CHX–2006–05) (approving rules to
implement a new trading model).
PO 00000
Frm 00057
Fmt 4703
Sfmt 4703
rates that reasonably correspond to the
respective transaction fee rates being
charged by the executing markets.
Accordingly, it is submitting changes to
Sections E.6 and E.8 of the Fee
Schedule, to reflect recent
developments regarding applicable
transaction fees assessed by Nasdaq on
account of NMS Linkage Plan
executions.7 Specifically, the proposal
would change the outbound fee for NMS
Linkage orders routed to Nasdaq (in
issues other than exchange-traded
funds) from $.0030/share to $.0015/
share. This change is not applicable to
orders for exchange-traded funds.
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b)(4) of the Act 8 in that it
provides for the equitable allocation of
reasonable dues, fees and other charges
among its members and is consistent
with the allocation of dues, fees and
other charges utilized by other selfregulatory organizations that have
implemented trading platforms similar
to the CHX new trading model.
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
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change establishes or changes a due, fee
or other charge imposed by the
Exchange, it has become effective
pursuant to Section 19(b)(3)(A) of the
Act 9 and subparagraph (f)(2) of Rule
19b–4 thereunder.10 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.
7 See Nasdaq Head Trader Alert #2006–176
(November 1, 2006, updated November 3, 2006).
8 15 U.S.C. 78f(b)(4).
9 15 U.S.C. 78s(b)(3)(A).
10 17 CFR 240.19b–4(f)(2).
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]]>Agencies
[Federal Register Volume 71, Number 235 (Thursday, December 7, 2006)]
[Notices]
[Pages 71000-71002]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-20730]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54832; File No. SR-BSE-2006-46]
Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing of Proposed Rule Change Amending Rules To Require
Securities Become Eligible for a Direct Registration System
November 29, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ notice is hereby given that on October 26, 2006, the
Boston Stock Exchange, Inc. (``BSE'') filed with the Securities and
Exchange Commission (``Commission'') the proposed rule change described
in Items I, II, and III below, which items have been prepared primarily
by BSE. The Commission is publishing this notice to solicit comments on
the proposed rule change from interested parties.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
BSE proposes to amend its rules to require securities of all listed
companies become eligible to participate in a Direct Registration
System (``DRS'') administered by a clearing agency registered under
Section 17A of the Act.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, 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. BSE has prepared summaries, set forth in sections (A),
(B), and (C) below, of the most significant aspects of these
statements.\2\
---------------------------------------------------------------------------
\2\ The Commission has modified portions of the text of the
summaries prepared by BSE.
---------------------------------------------------------------------------
(A) Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
(1) Purpose
DRS, as administered by The Depository Trust Company (``DTC''), is
an electronic system that allows an investor to establish either
through the issuer's transfer agent or through the investor's broker-
dealer a book-entry position on the books of the issuer and to
electronically transfer her position between the transfer agent and the
broker-dealer.\3\ DRS, therefore, allows an investor to have securities
registered in her name without having a certificate issued to her and
to electronically transfer, thereby eliminating the risk and delays
associated with the use of certificates, her securities to her broker-
dealer in order to effect a transaction. Ownership is recorded in book-
entry form, and instead of receiving a physical
[[Page 71001]]
certificate from the issuer or its transfer agent, the investor
receives a statement of holdings as evidence of ownership.
---------------------------------------------------------------------------
\3\ Currently, the only registered clearing agency operating a
DRS is DTC. For a description of DRS and the DRS facilities
administered by DTC, see Securities Exchange Act Release Nos. 37931
(November 7, 1996), 61 FR 58600 (November 15, 1996), [File No. SR-
DTC-96-15] (order granting approval to establish DRS) and 41862
(September 10, 1999), 64 FR 51162 (September 21, 1999), [File No.
SR-DTC-99-16] (order approving implementation of the Profile
Modification System).
---------------------------------------------------------------------------
BSE believes that DRS will be an important step in reducing the use
of securities certificates, which should facilitate transfers in
securities and could eventually lead to lower risks and costs for
issuers and investors.\4\ To encourage the use of DRS, the BSE proposes
to require that all listed securities be eligible to participate in
DRS. Under the proposed rule change, BSE would add Section 3 to Chapter
XXVII that would require any security initially listing on BSE on or
after January 1, 2007, to be eligible for a DRS that is operated by a
clearing agency registered under Section 17A of the Act. This
requirement, however, would not extend to (i) securities of companies
which already have securities listed on BSE, (ii) securities of
companies which immediately prior to such listing had securities listed
on another securities exchange in the U.S., or (iii) non-equity
securities which are book-entry only. Under the proposed rule, on and
after January 1, 2008, all securities listed on BSE, other than non-
equity securities which are book-entry only, must be eligible for a DRS
that is operated by a clearing agency registered under Section 17A of
the Act.\5\ While this proposal would require that securities be DRS
eligible, it would not mandate the elimination of securities
certificates and, subject to applicable state law and the company's
governing documents, an investor could still elect to receive a
securities certificate if an issuer elects to issue securities
certificates.
---------------------------------------------------------------------------
\4\ In that regard, in March 2004 the Commission published a
concept release that discussed, among other things, whether more
should be done to reduce the use of physical securities certificates
by individual investors. The Commission noted that the use of
physical certificates increases the costs and risks of clearing and
settling securities transactions, costs that most often are
ultimately borne by investors. Securities Exchange Act Release No.
8398 (March 11, 2004), 69 FR 12922 (March 18, 2004). Issuers may
save money by not having to print or process physical certificates
but may incur other ongoing expenses to maintain book-entry records,
such as mailing statements to shareholders.
\5\ The exact text of the BSE's proposed rule change is set
forth in its filing, which can be found at https://
www.bostonstock.com/legal/pending_rule_filings.html.
---------------------------------------------------------------------------
In order for a security to be eligible for the only DRS in
operation today, the issuer is required to use a transfer agent that
meets certain insurance and connectivity requirements.\6\ As a result,
some transfer agents may have to make changes to comply with their
requirements. In addition, certain issuers may have to make amendments
to their governing documents, such as their by-laws or corporate
charters, to be eligible to issue book-entry positions. To allow
sufficient time for these changes, BSE proposes implementing the
proposed requirement on January 1, 2008, for issuers with securities
already listed on BSE or another listed marketplace when the rule is
approved. Companies listing for the first time would have greater
flexibility to adopt any required changes and therefore the proposed
requirement would be applicable to new listings beginning January 1,
2007.
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\6\ DTC's rules require that a transfer agent (including an
issuer acting as its own transfer agent) acting for a company
issuing securities in DRS must be a DRS Limited Participant.
Securities Exchange Act Release No. 37931 (November 7, 1996), 61 FR
58600 (November 15, 1996), [File No. SR-DTC-96-15].
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(2) Statutory Basis
The statutory basis under the Act for this proposed rule change is
the requirement under Section 6(b)(5) of the Act, which requires, among
other things, that the rules of an exchange are designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in regulating, clearing, settling, processing
information with respect to, and facilitating transactions in
securities, 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.\7\ BSE believes that the
proposed rule is consistent with its obligations under Section 6(b)(5)
because requiring securities to be eligible to use DRS should increase
the trading of securities in held book-entry forms, which should in
turn facilitate the processing of securities transactions.
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\7\ 15 U.S.C. 78f(b)(5).
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(B) Self-Regulatory Organization's Statement on Burden on Competition
BSE 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
BSE has neither solicited nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Within thirty-five 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 ninety 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 Number SR-BSE-2006-46 in 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-2006-46. 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 Section, 100 F Street,
NE., Washington, DC 20549. Copies of such filings also will be
available for inspection and
[[Page 71002]]
copying at the principal office of BSE and on BSE's Web site,
www.bse.com. 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-
2006-46 and should be submitted on or before December 28, 2006.
For the Commission by the Division of Market Regulation,
pursuant to delegated authority.\8\
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\8\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-20730 Filed 12-6-06; 8:45 am]
BILLING CODE 8011-01-P
