Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change To List and Trade Options Already Listed on Another National Securities Exchange, 9607-9609 [E8-3167]

Download as PDF Federal Register / Vol. 73, No. 35 / Thursday, February 21, 2008 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57324; File No. SR–BSE– 2008–07] Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change To List and Trade Options Already Listed on Another National Securities Exchange February 13, 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 January 28, 2008, the Boston Stock Exchange (‘‘BSE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. This order provides notice of the proposal and approves the proposal on an accelerated basis. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend BOX Rule Ch. IV, Sec. 3(b)(v) to enable it to list and trade equity options that are otherwise ineligible for listing and trading on the Exchange if such options are listed and traded on another national securities exchange and the security or securities underlying such options meet BSE’s continued listing requirements. The text of the proposed rule change is available on BSE’s Web site (https://www.bse.com), at BSE’s principal office, and at the Commission’s Public Reference Room. pwalker on PROD1PC71 with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item III below. The BSE has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. 1 15 2 17 U.S.C. 78s(b)(1). CFR 240.19b–4. VerDate Aug<31>2005 16:34 Feb 20, 2008 Jkt 214001 A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The purpose of this proposed rule change is to revise the Exchange’s options listing standards so that as long as the options maintenance listing standards as set forth in Ch. IV, Sec. 4 of the BOX Rules are met and the option is listed and traded on another national securities exchange, the Exchange will be able to list and trade the option. Ch. IV, Sec. 3(b) of the BOX Rules sets forth the requirements that an underlying equity security must meet before the Exchange may initially list options on that security. The BSE notes that the requirements that an underlying equity security must meet for initial listing of options on that security are uniform among all the options exchanges. BOX Rule Ch. IV, Sec. 3(b)(v) applies to the listing of individual equity options on both ‘‘covered’’ and ‘‘uncovered’’ underlying securities, and sets forth the minimum market price at which an underlying security must trade for an option to be listed. In the case of an underlying security that is a ‘‘covered security’’ as defined under section 18(b)(1)(A) of the Securities Act of 1933 (‘‘1933 Act’’),3 the closing market price of the underlying security must be at least $3 per share for five previous consecutive business days prior to the date on which the Exchange submits an option class certification to The Options Clearing Corporation (‘‘OCC’’). In connection with underlying securities deemed to be ‘‘uncovered,’’ BOX rules require that such underlying security be at least $7.50 for the majority of business days during the three calendar months preceding the date of selection for such listing. In addition, an alternative listing procedure for ‘‘uncovered’’ securities also permits the listing of such options so long as: (1) The underlying security meets the guidelines for continued approval contained in Ch. IV, Sec. 4 of the BOX Rules; (2) options on such underlying security are traded on at least one other registered national securities exchange; and (3) the average daily volume (‘‘ADV’’) for such options over the last three calendar months preceding the date of selection has been at least 5,000 3 Section 18(b)(1)(A) of the 1933 Act provides that ‘‘[a] security is a covered security if such security is* * *listed, or authorized for listing, on the New York Stock Exchange or the American Stock Exchange, or listed or authorized for listing on the National Market System of the Nasdaq Stock Market (or any successor to such entities)* * *’’ See, 15 U.S.C. 77r(b)(1)(A). PO 00000 Frm 00092 Fmt 4703 Sfmt 4703 9607 contracts. Subparagraphs (i) through (iv) of Ch. IV, Sec. 3(b) of the BOX Rules further set forth minimum requirements for an underlying security such as shares outstanding, number of holders and trading volume. Under this proposed rule change, an option may be multiply-listed and traded as long as one other options exchange is trading the particular option and such underlying security of the option meets the Exchange’s continued listing requirements. The BSE notes that the requirements for listing additional series of an existing listed option (i.e., continued listing guidelines) are less stringent, largely because, in total, the Exchange’s guidelines assure that options will be listed and traded on securities of companies that are financially sound and subject to adequate minimum standards. The Exchange believes that although the continued listing requirements are uniform among the other options exchanges, the application of both the original and continued listing standard in the current market environment have had an anti-competitive effect. Specifically, the Exchange notes that on several occasions it has been unable to list and trade options classes that trade elsewhere because the underlying security of such option did not at that time meet original listing standards. However, the other options exchange(s) may continue to trade such options (and list additional series) based on the lower maintenance listing standards, while the Exchange is precluded from listing any options on such underlying security. The Exchange believes this is anticompetitive and inconsistent with the aims and goals of a national market system in options. To address this situation, the Exchange proposes to add a new rule to the BOX Rules and to amend the current listing requirements. Specifically, the proposed addition of Ch. IV, Sec. 3(b)(vi) of the BOX Rules provides that notwithstanding that a particular underlying security may not meet the requirements set forth in Ch. IV, Sec. 3(b)(i), (ii), (iv) and (v), the Exchange nonetheless could list and trade an option on such underlying security if (i) the underlying security meets continued listing requirements under Ch. IV, Sec. 4 of the BOX Rules; and (ii) options on such underlying security are listed and traded on at least one other registered national securities exchange.4 In 4 Telephone conversation between John Katovich, Executive Vice President and Chief Legal Officer, BSE and Mitra Mehr, Special Counsel, Division of Trading and Markets, Commission on February 12, E:\FR\FM\21FEN1.SGM Continued 21FEN1 9608 Federal Register / Vol. 73, No. 35 / Thursday, February 21, 2008 / Notices connection with the proposed changes, the Exchange represents that the procedures currently employed to determine whether a particular underlying security meets the initial listing criteria will similarly be applied to the continued listing criteria. The Exchange believes that this proposal is narrowly tailored to address the circumstances where an options class is currently ineligible for listing on the Exchange while at the same time, such option is trading on another options exchange(s). The BSE notes that when an underlying security meets the maintenance listing requirements and at least one other exchange lists and trades options on the underlying security, the option is available to the investing public. Therefore, the Exchange notes that the current proposal will not introduce any inappropriate additional listed options classes. The BSE submits that the adoption of the proposal is essential for competitive purposes and to promote a free and open market for the benefit of investors. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act,5 in general, and Section 6(b)(5) of the Act,6 in particular, in that it will serve to remove impediments to and perfect the mechanisms of a free and open market and a national market system and, in general, to protect investors and the public interest. 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 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. 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: IV. Commission’s Findings and Order Granting Accelerated Approval of the Proposed Rule Change After careful consideration, the Commission finds that the proposed rule change is consistent with the requirements of the Act and the regulations thereunder applicable to a national securities exchange.7 In 2008 to conform this sentence to the text of the proposed rule change. 5 15 U.S.C. 78f(b). 6 15 U.S.C. 78f(b)(5). 7 In approving this 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). III. Solicitation of Comments pwalker on PROD1PC71 with NOTICES particular, the Commission finds that the proposed rule change is consistent with Section 6(b)(5) of the Act,8 which requires that the rules of an exchange be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to remove impediments to and perfect the mechanism of a free and Paper Comments open market and a national market • Send paper comments in triplicate system, and, in general, to protect to Nancy M. Morris, Secretary, investors and the public interest. The Securities and Exchange Commission, proposal is narrowly tailored to address 100 F Street, NE., Washington, DC the circumstances where an equity 20549–1090. option class is currently ineligible for All submissions should refer to File initial listing on the Exchange even Number SR–BSE–2008–07. This file though it meets the Exchange’s number should be included on the subject line if e-mail is used. To help the continued listing standards and is trading on another options exchange. Commission process and review your Allowing BSE to list and trade options comments more efficiently, please use only one method. The Commission will on such underlying securities should post all comments on the Commission’s help promote competition among the exchanges that list and trade options. Internet Web site (https://www.sec.gov/ The Commission notes, and the rules/sro.shtml). Copies of the Exchange represents, that the submission, all subsequent procedures that the Exchange currently amendments, all written statements employs to determine whether a with respect to the proposed rule change that are filed with the particular underlying security meets the Commission, and all written initial equity option listing criteria for communications relating to the the Exchange will similarly be applied proposed rule change between the when determining whether an Commission and any person, other than underlying security meets the those that may be withheld from the Exchange’s continued listing criteria. public in accordance with the The Commission finds good cause, provisions of 5 U.S.C. 552, will be pursuant to Section 19(b)(2)(B) of the available for inspection and copying in Act,9 for approving the proposed rule the Commission’s Public Reference change prior to the 30th day after the Room, 100 F Street, NE., Washington, publication of the notice of the filing DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. thereof in the Federal Register. The Commission notes that the proposed Copies of such filing also will be rule change is substantially identical to available for inspection and copying at a proposed rule change submitted by the the principal office of BSE. All American Stock Exchange LLC,10 which comments received will be posted was previously approved by the without change; the Commission does Commission after an opportunity for not edit personal identifying information from submissions. You notice and comment, and therefore does should submit only information that not raise any new regulatory issues. you wish to make available publicly. All 8 15 U.S.C. 78f(b)(5). submissions should refer to File 9 15 U.S.C. 78s(b)(2)(B). Number SR–BSE–2008–07 and should 10 See, Securities Exchange Act Release No. 56598 be submitted on or before March 13, (October 2, 2007), 72 FR 57615 (October 10, 2007) 2008. 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–2008–07 on the subject line. VerDate Aug<31>2005 16:34 Feb 20, 2008 Jkt 214001 PO 00000 Frm 00093 Fmt 4703 Sfmt 4703 (SR–Amex–2007–48) (Order Approving Proposed Rule Change Modifying the Options Listing Criteria for Underlying Securities). See also, Securities Exchange Act Release Nos. 56647 (October 11, 2007), 72 FR 58702 (October 16, 2007) (SR–ISE– 2007–80) (Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change); 56774 (November 8, 2007), 72 FR 64694 (November 16, 2007) (SR–CBOE–2007–114) (Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change); 56797 (November 15, 2007), 72 FR 65798 (November 23, 2007) (SR– NYSEArca–2007–106) (Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change); and 56717 (October 29, 2007), 72 FR 62508 (November 5, 2007) (SR–Phlx–2007–73) (Notice of Filing and Order Granting Accelerated Approval of Proposed Rule Change). E:\FR\FM\21FEN1.SGM 21FEN1 Federal Register / Vol. 73, No. 35 / Thursday, February 21, 2008 / Notices V. Conclusion It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11 that the proposed rule change (SR–BSE–2008– 07) be, and it hereby is, approved on an accelerated basis. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.12 Florence E. Harmon, Deputy Secretary. [FR Doc. E8–3167 Filed 2–20–08; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–57326; File No. SR–CBOE– 2008–03] Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing of Proposed Rule Change Relating to Complex Orders Feburary 13, 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 January 14, 2008, the Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) a proposed rule change as described in Items I, II, and III below, which Items have been prepared substantially by CBOE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. pwalker on PROD1PC71 with NOTICES I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The Exchange proposes to amend its rules regarding complex orders. The text of the proposed rule change is available at CBOE, the Commission’s Public Reference Room, and https:// www.cboe.com/legal. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE 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 11 Id. 12 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate Aug<31>2005 16:34 Feb 20, 2008 Jkt 214001 in Item IV below. CBOE 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 is proposing to amend its priority provisions contained in CBOE Rules 6.45, 6.45A and 6.45B to provide that a complex order may be executed at a net debit or credit price with another member without giving priority to equivalent bids (offers) in the individual series legs that are represented in the public customer limit order book, provided that one leg of the complex order betters the corresponding bid (offer) in the public customer limit order book by at least the amount determined by the Exchange on a classby-class basis. The amount shall be either (i) one minimum trading increment (i.e., $0.10, $0.05 or $0.01, as applicable) or (ii) a $0.01 increment.3 Currently the rules provide that one leg of a complex order must better the corresponding bid (offer) in the public customer limit order book by at least one minimum trading increment.4 The Exchange believes that changing the rule to permit the minimum amount to be $0.01 would provide additional flexibility to better facilitate the orderly execution of complex orders, and would provide additional opportunities and incentives for members to provide price improvement to complex orders.5 2. Statutory Basis The Exchange believes the proposed rule change is consistent with section 6(b) of the Act,6 in general, and furthers 3 Additionally, the Exchange is proposing to make two non-substantive changes to Rule 6.45B(b) in order to conform the text of that rule to Rule 6.45A(b). Specifically, the Exchange is replacing the phrase ‘‘the trading crowd’’ with the phrase ‘‘open outcry’’ in Rule 6.45B(b) and inserting the phrase ‘‘at a net debit or credit price’’ in Rule 6.45B(b)(ii). 4 The rules also provide that a complex order may be executed at the same derived net price as other individual series legs represented in the trading crowd, which for purposes of the complex order priority provision includes broker-dealer orders resting in the electronic book and electronic quotes of Market-Makers. 5 Currently, for example, if a complex order spread market is quoted on a net debit/credit basis at $0.90 to $1.10 and there are orders represented in the public customer limit order book in the individual series at each of the respective prices, the complex order may only be executed with another member at a net price of $0.95 to $1.05. Under the proposed revisions, a complex order may be executed at a net price of $0.91 to $1.09, permitting price improvement at net prices ranging from $0.91–$0.94 and $1.06–$1.09. 6 15 U.S.C. 78f(b). PO 00000 Frm 00094 Fmt 4703 Sfmt 4703 9609 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, promote just and equitable principles of trade, remove impediments to and perfect the mechanisms of a free and open market and a national market system, and, in general, protect investors and the public interest. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition 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 No written comments were either solicited or received with respect to the proposed rule change. 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 CBOE 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–CBOE–2008–03 on the subject line. Paper Comments • Send paper comments in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 7 15 E:\FR\FM\21FEN1.SGM U.S.C. 78f(b)(5). 21FEN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 73, Number 35 (Thursday, February 21, 2008)]
[Notices]
[Pages 9607-9609]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-3167]



[[Page 9607]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57324; File No. SR-BSE-2008-07]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Order Granting Accelerated Approval of a Proposed 
Rule Change To List and Trade Options Already Listed on Another 
National Securities Exchange

February 13, 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 January 28, 2008, the Boston Stock Exchange (``BSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. This order 
provides notice of the proposal and approves the proposal on an 
accelerated basis.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend BOX Rule Ch. IV, Sec. 3(b)(v) to 
enable it to list and trade equity options that are otherwise 
ineligible for listing and trading on the Exchange if such options are 
listed and traded on another national securities exchange and the 
security or securities underlying such options meet BSE's continued 
listing requirements.
    The text of the proposed rule change is available on BSE's Web site 
(https://www.bse.com), at 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 III 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
    The purpose of this proposed rule change is to revise the 
Exchange's options listing standards so that as long as the options 
maintenance listing standards as set forth in Ch. IV, Sec. 4 of the BOX 
Rules are met and the option is listed and traded on another national 
securities exchange, the Exchange will be able to list and trade the 
option. Ch. IV, Sec. 3(b) of the BOX Rules sets forth the requirements 
that an underlying equity security must meet before the Exchange may 
initially list options on that security. The BSE notes that the 
requirements that an underlying equity security must meet for initial 
listing of options on that security are uniform among all the options 
exchanges.
    BOX Rule Ch. IV, Sec. 3(b)(v) applies to the listing of individual 
equity options on both ``covered'' and ``uncovered'' underlying 
securities, and sets forth the minimum market price at which an 
underlying security must trade for an option to be listed. In the case 
of an underlying security that is a ``covered security'' as defined 
under section 18(b)(1)(A) of the Securities Act of 1933 (``1933 
Act''),\3\ the closing market price of the underlying security must be 
at least $3 per share for five previous consecutive business days prior 
to the date on which the Exchange submits an option class certification 
to The Options Clearing Corporation (``OCC''). In connection with 
underlying securities deemed to be ``uncovered,'' BOX rules require 
that such underlying security be at least $7.50 for the majority of 
business days during the three calendar months preceding the date of 
selection for such listing. In addition, an alternative listing 
procedure for ``uncovered'' securities also permits the listing of such 
options so long as: (1) The underlying security meets the guidelines 
for continued approval contained in Ch. IV, Sec. 4 of the BOX Rules; 
(2) options on such underlying security are traded on at least one 
other registered national securities exchange; and (3) the average 
daily volume (``ADV'') for such options over the last three calendar 
months preceding the date of selection has been at least 5,000 
contracts. Subparagraphs (i) through (iv) of Ch. IV, Sec. 3(b) of the 
BOX Rules further set forth minimum requirements for an underlying 
security such as shares outstanding, number of holders and trading 
volume.
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    \3\ Section 18(b)(1)(A) of the 1933 Act provides that ``[a] 
security is a covered security if such security is* * *listed, or 
authorized for listing, on the New York Stock Exchange or the 
American Stock Exchange, or listed or authorized for listing on the 
National Market System of the Nasdaq Stock Market (or any successor 
to such entities)* * *'' See, 15 U.S.C. 77r(b)(1)(A).
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    Under this proposed rule change, an option may be multiply-listed 
and traded as long as one other options exchange is trading the 
particular option and such underlying security of the option meets the 
Exchange's continued listing requirements. The BSE notes that the 
requirements for listing additional series of an existing listed option 
(i.e., continued listing guidelines) are less stringent, largely 
because, in total, the Exchange's guidelines assure that options will 
be listed and traded on securities of companies that are financially 
sound and subject to adequate minimum standards.
    The Exchange believes that although the continued listing 
requirements are uniform among the other options exchanges, the 
application of both the original and continued listing standard in the 
current market environment have had an anti-competitive effect. 
Specifically, the Exchange notes that on several occasions it has been 
unable to list and trade options classes that trade elsewhere because 
the underlying security of such option did not at that time meet 
original listing standards. However, the other options exchange(s) may 
continue to trade such options (and list additional series) based on 
the lower maintenance listing standards, while the Exchange is 
precluded from listing any options on such underlying security. The 
Exchange believes this is anti-competitive and inconsistent with the 
aims and goals of a national market system in options.
    To address this situation, the Exchange proposes to add a new rule 
to the BOX Rules and to amend the current listing requirements. 
Specifically, the proposed addition of Ch. IV, Sec. 3(b)(vi) of the BOX 
Rules provides that notwithstanding that a particular underlying 
security may not meet the requirements set forth in Ch. IV, Sec. 
3(b)(i), (ii), (iv) and (v), the Exchange nonetheless could list and 
trade an option on such underlying security if (i) the underlying 
security meets continued listing requirements under Ch. IV, Sec. 4 of 
the BOX Rules; and (ii) options on such underlying security are listed 
and traded on at least one other registered national securities 
exchange.\4\ In

[[Page 9608]]

connection with the proposed changes, the Exchange represents that the 
procedures currently employed to determine whether a particular 
underlying security meets the initial listing criteria will similarly 
be applied to the continued listing criteria.
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    \4\ Telephone conversation between John Katovich, Executive Vice 
President and Chief Legal Officer, BSE and Mitra Mehr, Special 
Counsel, Division of Trading and Markets, Commission on February 12, 
2008 to conform this sentence to the text of the proposed rule 
change.
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    The Exchange believes that this proposal is narrowly tailored to 
address the circumstances where an options class is currently 
ineligible for listing on the Exchange while at the same time, such 
option is trading on another options exchange(s). The BSE notes that 
when an underlying security meets the maintenance listing requirements 
and at least one other exchange lists and trades options on the 
underlying security, the option is available to the investing public. 
Therefore, the Exchange notes that the current proposal will not 
introduce any inappropriate additional listed options classes. The BSE 
submits that the adoption of the proposal is essential for competitive 
purposes and to promote a free and open market for the benefit of 
investors.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\5\ in general, and Section 
6(b)(5) of the Act,\6\ in particular, in that it will serve to remove 
impediments to and perfect the mechanisms of a free and open market and 
a national market system and, in general, to protect investors and the 
public interest.
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    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(5).
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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 not necessary or appropriate in 
furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    The Exchange has neither solicited nor received comments on the 
proposed rule change.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-BSE-2008-07 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-2008-07. 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 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-2008-07 and should be 
submitted on or before March 13, 2008.

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

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
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\ which requires that the 
rules of an exchange be designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
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. The proposal is narrowly tailored to 
address the circumstances where an equity option class is currently 
ineligible for initial listing on the Exchange even though it meets the 
Exchange's continued listing standards and is trading on another 
options exchange. Allowing BSE to list and trade options on such 
underlying securities should help promote competition among the 
exchanges that list and trade options. The Commission notes, and the 
Exchange represents, that the procedures that the Exchange currently 
employs to determine whether a particular underlying security meets the 
initial equity option listing criteria for the Exchange will similarly 
be applied when determining whether an underlying security meets the 
Exchange's continued listing criteria.
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    \7\ In approving this 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).
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    The Commission finds good cause, pursuant to Section 19(b)(2)(B) of 
the Act,\9\ for approving the proposed rule change prior to the 30th 
day after the publication of the notice of the filing thereof in the 
Federal Register. The Commission notes that the proposed rule change is 
substantially identical to a proposed rule change submitted by the 
American Stock Exchange LLC,\10\ which was previously approved by the 
Commission after an opportunity for notice and comment, and therefore 
does not raise any new regulatory issues.
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    \9\ 15 U.S.C. 78s(b)(2)(B).
    \10\ See, Securities Exchange Act Release No. 56598 (October 2, 
2007), 72 FR 57615 (October 10, 2007) (SR-Amex-2007-48) (Order 
Approving Proposed Rule Change Modifying the Options Listing 
Criteria for Underlying Securities). See also, Securities Exchange 
Act Release Nos. 56647 (October 11, 2007), 72 FR 58702 (October 16, 
2007) (SR-ISE-2007-80) (Notice of Filing and Order Granting 
Accelerated Approval of Proposed Rule Change); 56774 (November 8, 
2007), 72 FR 64694 (November 16, 2007) (SR-CBOE-2007-114) (Notice of 
Filing and Order Granting Accelerated Approval of Proposed Rule 
Change); 56797 (November 15, 2007), 72 FR 65798 (November 23, 2007) 
(SR-NYSEArca-2007-106) (Notice of Filing and Order Granting 
Accelerated Approval of Proposed Rule Change); and 56717 (October 
29, 2007), 72 FR 62508 (November 5, 2007) (SR-Phlx-2007-73) (Notice 
of Filing and Order Granting Accelerated Approval of Proposed Rule 
Change).

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[[Page 9609]]

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-BSE-2008-07) be, and it 
hereby is, approved on an accelerated basis.
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    \11\ Id.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E8-3167 Filed 2-20-08; 8:45 am]
BILLING CODE 8011-01-P

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