Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend the MRVP of the Boston Options Exchange With Respect to Contrary Exercise Advice Violations, 2294-2295 [E8-388]

Download as PDF 2294 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Notices rmajette on PROD1PC64 with NOTICES Number SR–Amex–2007–141 and should be submitted on or before February 4, 2008. IV. Commission’s Findings and Order Granting Accelerated Approval of the Proposed Rule Change After careful review, 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 In particular, the Commission finds that the proposed rule change is consistent with section 6(b)(5) of the Act 8 in that it is designed 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 and perfect the mechanism of a free and open market and a national market system, and, in general, to protect investors and the public interest. Specifically, the Commission believes that the proposed expansion to permit the Exchange to select a total of 10 individual underlying stocks trading at less than $50 on which option series may be listed at $1 strike price intervals, and the request to make the Program permanent, should provide investors with added flexibility in the trading of equity options and further the public interest by allowing investors to establish equity options positions that are better tailored to meet their investment objectives. The Commission also believes that the proposal strikes a reasonable balance between the Exchange’s desire to accommodate market participants by offering a wider array of investment opportunities and the need to avoid unnecessary proliferation of options series and the corresponding increase in quotes. The Commission notes that the existing restrictions on listing $1 strike price intervals will continue to apply, e.g., no $1 strike price may be listed (a) that is greater than $5 from the underlying stock’s closing price in its primary market on the previous day, or (b) that would result in strike prices being $0.50 apart. The Commission expects the Exchange to continue to monitor for options with little or no open interest and trading activity and to act promptly to delist such options. In addition, the Commission expects that Amex will 7 In approving this proposed rule change, the Commission notes that it has considered the proposed rule’s impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). 8 15 U.S.C. 78f(b)(5). VerDate Aug<31>2005 15:22 Jan 11, 2008 Jkt 214001 continue to monitor the trading volume associated with the additional options series listed as a result of this proposal and the effect of these additional series on market fragmentation and on the capacity of the Exchange’s, OPRA’s, and vendors’ automated systems. The Commission finds good cause for approving the proposed rule change before the 30th day after the date of publication of notice of filing thereof in the Federal Register. The Commission has recently approved a substantially similar proposal submitted by the Chicago Board Options Exchange, Incorporated, which was published for notice and comment.9 Accelerating approval of this proposal will allow Amex the same flexibility with respect to the listing of $1 strikes, creating additional competition in the market for options listed and traded under the Program.10 Therefore, the Commission finds good cause, consistent with section 19(b)(2) of the Act,11 to approve the proposed rule change on an accelerated basis. V. Conclusion It is therefore ordered, pursuant to section 19(b)(2) of the Act,12 that the proposed rule change (SR–Amex–2007– 141) be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.13 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–390 Filed 1–11–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Release No. 34–57108; File No. SR–BSE– 2007–54] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 1 Thereto, To Amend the MRVP of the Boston Options Exchange With Respect to Contrary Exercise Advice Violations January 7, 2008. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 9 See Securities Exchange Act Release No. 57049 (December 27, 2007), 73 FR 528 (January 3, 2008) (SR–CBOE–2007–125). 10 Telephone conversation between Andrea Williams, Assistant General Counsel, Amex, and Edward Cho, Special Counsel, Division of Trading and Markets, Commission, dated January 4, 2008. 11 15 U.S.C. 78s(b)(2). 12 Id. 13 17 CFR 200.30–3(a)(12). PO 00000 Frm 00083 Fmt 4703 Sfmt 4703 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on December 20, 2007, 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. On January 7, 2008, the Exchange filed Amendment No. 1 to the proposed rule change.3 The Commission is publishing this notice to solicit comments on the proposed rule change, as modified by Amendment No. 1, 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 Boston Options Exchange (‘‘BOX’’) rules related to Contrary Exercise Advice violations. The text of the proposed rule change is available on the Exchange’s Web site (https://www.bostonstock.com), at the BSE’s principal office, 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. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to increase and strengthen the sanctions imposed pursuant to its Minor Rule Violation Plan (‘‘MRVP’’) on any member who fails to submit to the Exchange in a timely manner, pursuant to BOX Rules Chapter X, section 2(f), ‘‘Contrary Exercise Advice Violations’’ or exercise instruction relating to the exercise or nonexercise of a noncash-settled equity option. The Exchange believes that increasing the fine levels specified with 1 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Amendment No. 1 revised the proposed rule text to clarify how fines for the third and subsequent offenses would be imposed. 2 17 E:\FR\FM\14JAN1.SGM 14JAN1 Federal Register / Vol. 73, No. 9 / Monday, January 14, 2008 / Notices respect to both individual members and member organizations and lengthening the surveillance period from a 12-month period to a rolling 24-month period will serve as an effective deterrent to such violative conduct. In addition, the Exchange, as a member of the Intermarket Surveillance Group (‘‘ISG’’) executed and filed on October 29, 2007 with the Commission, a final version of an Agreement pursuant to section 17(d) of the Act (the ‘‘17d–2 Agreement’’).4 As set forth in the 17d–2 Agreement, the members of the ISG have agreed that their respective rules concerning the filing of Expiring Exercise Declarations, also referred to as Contrary Exercise Advices are common rules. As a result, the proposal to amend the MRVP will further result in consistency in sanctions among the ISG members that are signatories to the 17d– 2 Agreement concerning Contrary Exercise Advice violations.5 2. Statutory Basis The Exchange believes that the proposed rule change is consistent with section 6(b) of the Act,6 in general, and furthers the objectives of section 6(b)(5) of the Act,7 in particular, in that it is designed to prevent fraudulent and manipulative acts and practices; to promote just and equitable principles of trade; to protect investors and the public interest in that it is designed 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 and perfect the mechanism of a free and open market and a national market system; and, in general, to protect investors and the public interest. Additionally, the Exchange believes that the proposed rule change will promote consistency in minor rule violations and respective SRO reporting obligations as set forth pursuant to Rule 19d–1(c)(2) under the Act,8 which governs minor rule violation plans. rmajette on PROD1PC64 with NOTICES 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. 4 See letter to Richard Holley, Senior Special Counsel, Division of Trading and Markets, Commission, from Nyieri Nazarian, Assistant General Counsel, American Stock Exchange LLC (‘‘Amex’’), dated October 29, 2007. 5 See Amex Rule 590. 6 15 U.S.C. 78f(b). 7 15 U.S.C. 78f(b)(5). 8 17 CFR 240.19d–1(c)(2). VerDate Aug<31>2005 15:22 Jan 11, 2008 Jkt 214001 C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others The Exchange neither solicited nor received comments on the proposal. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action 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 Exchange 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–2007–54 on the subject line. 2295 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, 100 F Street, NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. 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–2007–54 and should be submitted on or before February 4, 2008. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.9 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–388 Filed 1–11–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57109; File No. SR–CBOE– 2007–134] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Order Granting Approval of Proposed Rule Change Relating to the Continuous Quoting Obligations of DPMs January 7, 2008. On November 9, 2007, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the • Send paper comments in triplicate Securities and Exchange Commission to Nancy M. Morris, Secretary, (‘‘Commission’’), pursuant to section Securities and Exchange Commission, 19(b)(1) of the Securities Exchange Act 100 F Street, NE., Washington, DC of 1934 (‘‘Act’’) 1 and Rule 19b-4 20549–1090. thereunder,2 a proposed rule change to All submissions should refer to File modify the continuous electronic Number SR–BSE–2007–54. This file quoting obligation of DPMs in multiplynumber should be included on the subject line if e-mail is used. To help the listed option classes. The proposed rule change was published for comment in Commission process and review your the Federal Register on November 29, comments more efficiently, please use 3 only one method. The Commission will 2007. The Commission received no comments on the proposed rule change. post all comments on the Commission’s This order approves the proposed rule Internet Web site (https://www.sec.gov/ change. rules/sro.shtml). Copies of the CBOE proposes to reduce the submission, all subsequent continuous electronic quoting obligation amendments, all written statements of DPMs in multiply-listed option with respect to the proposed rule classes, and make them consistent with change that are filed with the Paper Comments 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 PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 9 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 3 See Securities Exchange Act Release No. 56824 (November 20, 2007), 72 FR 67615. 1 15 E:\FR\FM\14JAN1.SGM 14JAN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 9 (Monday, January 14, 2008)]
[Notices]
[Pages 2294-2295]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-388]


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SECURITIES AND EXCHANGE COMMISSION

Release No. 34-57108; File No. SR-BSE-2007-54]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change, as Modified by Amendment No. 
1 Thereto, To Amend the MRVP of the Boston Options Exchange With 
Respect to Contrary Exercise Advice Violations

January 7, 2008.
    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 December 20, 2007, 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. 
On January 7, 2008, the Exchange filed Amendment No. 1 to the proposed 
rule change.\3\ The Commission is publishing this notice to solicit 
comments on the proposed rule change, as modified by Amendment No. 1, 
from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ Amendment No. 1 revised the proposed rule text to clarify 
how fines for the third and subsequent offenses would be imposed.
---------------------------------------------------------------------------

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

    The Exchange proposes to amend the Boston Options Exchange 
(``BOX'') rules related to Contrary Exercise Advice violations. The 
text of the proposed rule change is available on the Exchange's Web 
site (https://www.bostonstock.com), at the BSE's principal office, 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to increase and strengthen the sanctions 
imposed pursuant to its Minor Rule Violation Plan (``MRVP'') on any 
member who fails to submit to the Exchange in a timely manner, pursuant 
to BOX Rules Chapter X, section 2(f), ``Contrary Exercise Advice 
Violations'' or exercise instruction relating to the exercise or 
nonexercise of a noncash-settled equity option. The Exchange believes 
that increasing the fine levels specified with

[[Page 2295]]

respect to both individual members and member organizations and 
lengthening the surveillance period from a 12-month period to a rolling 
24-month period will serve as an effective deterrent to such violative 
conduct.
    In addition, the Exchange, as a member of the Intermarket 
Surveillance Group (``ISG'') executed and filed on October 29, 2007 
with the Commission, a final version of an Agreement pursuant to 
section 17(d) of the Act (the ``17d-2 Agreement'').\4\ As set forth in 
the 17d-2 Agreement, the members of the ISG have agreed that their 
respective rules concerning the filing of Expiring Exercise 
Declarations, also referred to as Contrary Exercise Advices are common 
rules. As a result, the proposal to amend the MRVP will further result 
in consistency in sanctions among the ISG members that are signatories 
to the 17d-2 Agreement concerning Contrary Exercise Advice 
violations.\5\
---------------------------------------------------------------------------

    \4\ See letter to Richard Holley, Senior Special Counsel, 
Division of Trading and Markets, Commission, from Nyieri Nazarian, 
Assistant General Counsel, American Stock Exchange LLC (``Amex''), 
dated October 29, 2007.
    \5\ See Amex Rule 590.
---------------------------------------------------------------------------

2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\6\ in general, and furthers the 
objectives of section 6(b)(5) of the Act,\7\ in particular, in that it 
is designed to prevent fraudulent and manipulative acts and practices; 
to promote just and equitable principles of trade; to protect investors 
and the public interest in that it is designed 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 and perfect the 
mechanism of a free and open market and a national market system; and, 
in general, to protect investors and the public interest. Additionally, 
the Exchange believes that the proposed rule change will promote 
consistency in minor rule violations and respective SRO reporting 
obligations as set forth pursuant to Rule 19d-1(c)(2) under the Act,\8\ 
which governs minor rule violation plans.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 17 CFR 240.19d-1(c)(2).
---------------------------------------------------------------------------

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

    The Exchange neither solicited nor received comments on the 
proposal.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    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 Exchange 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-2007-54 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-2007-54. 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, 100 F Street, NE., 
Washington, DC 20549, on official business days between the hours of 10 
a.m. and 3 p.m. 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-2007-54 and should be 
submitted on or before February 4, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

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

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-388 Filed 1-11-08; 8:45 am]
BILLING CODE 8011-01-P

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