Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Regarding Transfer of Ownership of MX U.S. 2, Inc., 52434-52436 [E8-20869]
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52434
Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / Notices
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(1) An SRO wishing to incorporate
rules of another SRO by reference has
submitted a written request for an order
exempting it from the requirement in
Section 19(b) of the Exchange Act to file
proposed rule changes relating to the
rules incorporated by reference, has
identified the applicable originating
SROs, together with the rules it wants
to incorporate by reference, and
otherwise has complied with the
procedural requirements set forth in the
Commission’s release governing
procedures for requesting exemptive
orders pursuant to Rule 0–12 under the
Exchange Act;11
(2) an incorporating SRO has
requested incorporation of categories of
rules (rather than individual rules
within a category) that are not trading
rules (e.g., the SRO has requested
incorporation of rules such as margin,
suitability, arbitration); and
(3) the incorporating SRO has
reasonable procedures in place to
provide written notice to its members
each time a change is proposed to the
incorporated rules of another SRO.
The Commission believes that it is
appropriate to issue an exemption,
subject to the conditions described
above, to allow Phlx to incorporate by
reference the margin rules of the NYSE
or CBOE (by allowing its members to
elect to be bound by the margin rules of
either the NYSE or CBOE), without
being subject to the rule filing
requirements of Section 19(b) of the
Exchange Act whenever the SRO’s
margin rules that are incorporated by
reference change. The Commission
believes that this exemption will
promote more efficient use of
Commission and Phlx resources by
avoiding duplicative rule filings based
on simultaneous changes to identical
rule text sought by more than one SRO.
The Commission notes in granting this
exemption, that Phlx by incorporating
by reference another SRO’s margin rules
would agree to be governed by the
incorporated rules, as amended from
time to time, but not be required to file
a separate proposed rule change with
the Commission each time either the
NYSE or CBOE seeks to modify its
margin rules.
Phlx is requesting to incorporate by
reference the whole category of the
NYSE and CBOE margin rules (i.e., did
not ‘‘cherry-pick’’ certain individual
rules within a category), which are
regulatory rules and not trading rules.
11 See 17 CFR 240.0–12 and Exchange Act Release
No. 39624 (February 5, 1998), 63 FR 8101 (February
18, 1998) (Commission Procedures for Filing
Applications for Orders for Exemptive Relief
Pursuant to Section 36 of the Exchange Act; Final
Rule).
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The Commission also has previously
approved the incorporation by reference
of the NYSE and CBOE margin rules for
the International Securities Exchange
and the Boston Options Exchange.12 The
Commission notes that the Exchange
previously requested, and the
Commission granted, a request by Phlx
to incorporate by reference, the NASD
Code of Arbitration Procedure, subject
to certain conditions.13 Consistent with
the conditions attendant to its prior
exemptive request, the Exchange has
agreed to continue to provide written
notice to its members whenever the
NYSE or CBOE proposes a change to its
margin rules.14 This procedure will
provide Phlx members with notice of a
proposed rule change that affects their
interests, so that they would have the
opportunity to comment on it.
For the reasons discussed above, the
Commission finds that the exemption is
necessary or appropriate in the public
interest, and is consistent with the
protection of investors.
Accordingly, it is ordered, pursuant to
Section 36 of the Exchange Act,15 that
Phlx, with respect to the margin rules of
the NYSE and CBOE that Phlx proposes
to incorporate by reference as specified
above, and subject to the conditions
described above, shall be exempt from
rule filing requirements of Section 19(b)
of the Exchange Act to the extent that
Section 19(b) would otherwise require
submission of a proposed rule change
filing with the Commission.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–20809 Filed 9–8–08; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–58445; File No. SR–BSE–
2008–43]
Self-Regulatory Organizations; Boston
Stock Exchange, Inc.; Notice of Filing
and Immediate Effectiveness of
Proposed Rule Change Regarding
Transfer of Ownership of MX U.S. 2,
Inc.
August 29, 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 August
28, 2008, the Boston Stock Exchange,
Inc. (‘‘BSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
Items I and II below, which Items have
been substantially prepared by the
BSE.3 The Commission is publishing
this notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is submitting the
proposed rule change to the
Commission to amend the proposed
Sixth Amended and Restated Operating
Agreement (‘‘BOX LLC Agreement’’), of
the Boston Options Exchange Group
LLC (‘‘BOX LLC’’), in connection with
´
the transfer by the Montreal Exchange
Inc.,4 a company incorporated in
´
Quebec, Canada (‘‘MX’’), of its
ownership interest in MX U.S. 2, Inc.,
a U.S. subsidiary of MX (‘‘MX U.S. 2’’).5
The text of the proposed rule change is
available at the Exchange, the
Commission’s Public Reference Room,
and https://www.bostonstock.com.
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
proposal. The text of these statements
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 Capitalized terms not otherwise defined herein
shall have the meanings set forth in the BOX LLC
Agreement.
4 The Montreal Exchange Inc. is also known in
´
´
French as the Bourse de Montreal Inc.
5 See Securities Exchange Act Release No. 58324
(August 7, 2008), 73 FR 46936 (August 12, 2008)
(SR–BSE–2008–25).
2 17
12 Exchange Act Release No. 49260 (February 17,
2004), 69 FR 8500 (February 24, 2004).
13 See Exchange Act Release No. 49260 (February
17, 2004), 69 FR 8500 (February 24, 2004).
14 See supra note 1.
15 15 U.S.C. 78mm.
16 17 CFR 200.30–3(a)(76).
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Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / Notices
may be examined at the places specified
in Item IV below. The BSE has prepared
summaries, set forth in Sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
jlentini on PROD1PC65 with NOTICES
1. Purpose
On January 13, 2004, the Commission
approved four BSE proposals that
together established, through an
operating agreement among its owners,
a Delaware limited liability company,
BOX LLC, to operate BOX as an options
trading facility of the Exchange.6 MX
owns a 100% ownership interest in MX
U.S. 2, which holds a 31.37%
ownership interest in BOX LLC.7 MX
has transferred 100% of its common
stock ownership interest in MX U.S. 2
to MX U.S. 1, Inc., a wholly owned U.S.
subsidiary of MX (‘‘MX U.S. 1’’)
(‘‘Common Stock Transfer’’). 3226507
Nova Scotia Company, a Nova Scotia,
Canada unlimited liability company, a
subsidiary of MX (‘‘NSULC 2’’), has also
acquired 100% of the preferred stock of
MX U.S. 2 (‘‘Preferred Stock Transfer’’).
NSULC 2 is a direct subsidiary of MX
and 3226506 Nova Scotia Company, a
Nova Scotia, Canada unlimited liability
company and a wholly owned
subsidiary of MX (‘‘NSULC 1’’).
Furthermore, NSULC 1 has acquired
0.1% of the common stock of NSULC 2
(‘‘NSULC 2 Transfer’’ and collectively
with the Common Stock Transfer and
the Preferred Stock Transfer, the
‘‘Transfers’’).
The Exchange is submitting the
proposed rule change to the
Commission to amend the BOX LLC
Agreement pursuant to the proposed
Instruments of Accession in connection
with the Transfers. As a result of the
Transfers, MX U.S. 2 is a direct
subsidiary of MX U.S. 1 and NSULC 2.
6 See Securities Exchange Act Release No. 49066
(January 13, 2004), 69 FR 2773 (January 20, 2004)
(establishing a fee schedule for the proposed BOX
facility); Securities Exchange Act Release No. 49065
(January 13, 2004), 69 FR 2768 (January 20, 2004)
(creating Boston Options Exchange Regulation LLC
to which the BSE would delegate its self-regulatory
functions with respect to the BOX facility);
Securities Exchange Act Release No. 49068 (January
13, 2004), 69 FR 2775 (January 20, 2004) (approving
trading rules for the BOX facility); Securities
Exchange Act Release No. 49067 (January 13, 2004),
69 FR 2761 (January 20, 2004) (approving certain
regulatory provisions of the operating agreement of
BOX LLC).
7 Upon the consummation of the Exchange’s
transfer of its 21.87% ownership interest in BOX to
MX U.S. 2, MX U.S. 2 will hold a 53.24%
ownership interest in BOX (‘‘BSE Transfer’’). See
Securities Exchange Act Release No. 58324 (August
7, 2008), 73 FR 46936 (August 12, 2008) (SR–BSE–
2008–25).
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Pursuant to section 8.4(g) of the BOX
LLC Agreement, as previously approved
by the Commission, BOX LLC is
required to amend the BOX LLC
Agreement to make a Controlling
Person8 a party to the BOX LLC
Agreement if such Controlling Person
establishes a Controlling Interest9 in any
BOX Member that, alone or together
with any Affiliate of such BOX Member,
holds a Percentage Interest in BOX
equal to or greater than 20%.10 Pursuant
to the Common Stock Transfer and the
Preferred Stock Transfer, MX U.S. 1 and
NSULC 2 have acquired a Controlling
Interest in MX U.S. 2, which owns a
31.37% ownership interest in BOX LLC
and will own a 53.24% ownership
interest in BOX LLC upon the
consummation of the BSE Transfer. MX
U.S. 1 and NSULC 2, as Controlling
Persons, are required to and will
become parties to the BOX LLC
Agreement pursuant to the proposed
Instruments of Accession. Furthermore,
NSULC 1, which acquired 0.1% of the
common stock ownership interest in
NSULC 2, a direct subsidiary of MX that
holds an ownership interest in 100% of
the preferred shares of MX U.S. 2 that
holds and will hold an interest in BOX
that is greater than twenty percent of all
outstanding BOX ownership interests, is
also required to and will become a party
to the BOX LLC Agreement. As a result,
MX U.S. 1, NSULC 1 and NSULC 2 will
agree to abide by all the provisions of
the BOX LLC Agreement, including
those provisions requiring submission
to the jurisdiction of the Commission.11
8 A ‘‘Controlling Person’’ is defined as ‘‘a Person
who, alone or together with any Affiliate of such
Person, holds a controlling interest in a [BOX]
Member.’’ See Section 8.4(g)(v)(B), BOX LLC
Agreement.
9 A ‘‘Controlling Interest’’ is defined as ‘‘the direct
or indirect ownership of 25% or more of the total
voting power of all equity securities of a Member
(other than voting rights solely with respect to
matters affecting the rights, preferences, or
privileges of a particular class of equity securities),
by any Person, alone or together with any Affiliate
of such Person.’’ See Section 8.4(g)(v)(A), BOX LLC
Agreement.
10 See Section 8.4(g), BOX LLC Agreement.
11 The BOX LLC states, in part, that ‘‘the
Members, officers, directors, agents, and employees
of Members irrevocably submit to the exclusive
jurisdiction of the U.S. federal courts, U.S.
Securities and Exchange Commission, and the
Boston Stock Exchange, for the purposes of any
suit, action or proceeding pursuant to U.S. federal
securities laws, the rules or regulations thereunder,
arising out of, or relating to, BOX activities or
Article 19.6(a), (except that such jurisdictions shall
also include Delaware for any such matter relating
to the organization or internal affairs of BOX,
provided that such matter is not related to trading
on, or the regulation, of the BOX Market), and
hereby waive, and agree not to assert by way of
motion, as a defense or otherwise in any such suit,
action or proceeding, any claims that they are not
personally subject to the jurisdiction of the U.S.
Securities and Exchange Commission, that the suit,
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52435
For the reasons stated above, the BSE
is submitting to the Commission the
proposed Instruments of Accession to
the BOX LLC Agreement as a rule
change.
2. Statutory Basis
The Exchange believes that the
proposal is consistent with the
requirements of section 6(b) of the
Act,12 in general, and furthers the
objectives of section 6(b)(1),13 in
particular, in that it enables the
Exchange to be so organized so as to
have the capacity to be able to carry out
the purposes of the Act and to comply,
and to enforce compliance by its
exchange members and persons
associated with its exchange members,
with the provisions of the Act, the rules
and regulations thereunder, and the
rules of the Exchange. The Exchange
also believes that this filing furthers the
objectives of section 6(b)(5) of the Act14
in that it is designed to facilitate
transactions in securities, 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
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.
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. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (i) Significantly affect
the protection of investors or the public
action or proceeding is an inconvenient forum or
that the venue of the suit, action or proceeding is
improper, or that the subject matter hereof may not
be enforced in or by such courts or agency.’’ See
BOX LLC Agreement, Section 19.6.
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(5).
14 15 U.S.C. 78f(b)(5).
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Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / Notices
interest; (ii) impose any significant
burden on competition; and (iii) become
operative for 30 days from the date on
which it was filed, or such shorter time
as the Commission may designate if
consistent with the protection of
investors and the public interest, it has
become effective pursuant to section
19(b)(3)(A) of the Act15 and Rule 19b–
4(f)(6) thereunder.16
A proposed rule change filed under
Rule 19b–4(f)(6) normally may not
become operative prior to 30 days after
the date of filing.17 However, Rule 19b–
4(f)(6)(iii) permits the Commission to
designate a shorter time if such action
is consistent with the protection of
investors and the public interest.18 The
Exchange has requested that the
Commission waive the 5-day pre-filing
requirement and the 30-day operative
delay.19 The Commission believes that
waiving the 5-day pre-filing requirement
and the 30-day operative delay is
consistent with the protection of
investors and the public interest
because BSE has represented that the
Instruments of Accession will be
executed on August 29, 2008, and there
is no reason to delay implementation of
the changes to the BOX LLC Agreement
pursuant to the Instruments of
Accession. For these reasons, the
Commission designates the proposal to
be operative upon filing with the
Commission.20
At any time within 60 days of the
filing of the 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.21
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
15 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule
19b–4(f)(6)(iii) requires the self-regulatory
organization to give the Commission notice of its
intent to file the proposed rule change, along with
a brief description and text of the proposed rule
change, at least five business days prior to the date
of filing of the proposed rule change, or such
shorter time as designated by the Commission.
18 17 CFR 240.19b–4(f)(6)(iii).
19 See Email from Lisa J. Fall, General Counsel
and Corporate Secretary, BOX, to Molly Kim,
Special Counsel, Division of Trading and Markets,
Commission, on August 29, 2008.
20 For purposes only of waiving the 30-day
operative delay, the Commission has considered the
proposed rule’s impact on efficiency, competition,
and capital formation. 15 U.S.C. 78c(f).
21 See 15 U.S.C. 78s(b)(3)(C).
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16 17
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change is consistent with the Act.
Comments may be submitted by any of
the following methods:
SECURITIES AND EXCHANGE
COMMISSION
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–2008–43 on the
subject line.
[Release No. 34–58443; File No. SR–NYSE–
2008–79]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing and Order Granting Accelerated
Approval of Proposed Rule Change to
Reduce the Monthly Fee for NYSE
Realtime Reference Prices
August 29, 2008.
Paper Comments
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 August
28, 2008, the New York Stock Exchange
LLC (the ‘‘NYSE’’ or the ‘‘Exchange’’)
All submissions should refer to File
filed with the Securities and Exchange
Number SR–BSE–2008–43. This file
Commission (‘‘Commission’’) the
number should be included on the
proposed rule change as described in
subject line if e-mail is used. To help the
Items I and II below, which Items have
Commission process and review your
been prepared by the Exchange. The
comments more efficiently, please use
Commission is publishing this notice to
only one method. The Commission will
solicit comments on the proposed rule
post all comments on the Commission’s
change from interested persons, and is
Internet Web site (https://www.sec.gov/
approving the proposal on an
rules/sro.shtml). Copies of the
accelerated basis.
submission, all subsequent
I. Self-Regulatory Organization’s
amendments, all written statements
Statement of the Terms of Substance of
with respect to the proposed rule
the Proposed Rule Change
change that are filed with the
Commission, and all written
The Exchange proposes to reduce the
communications relating to the
fixed monthly fee that applies to its
proposed rule change between the
‘‘NYSE Realtime Reference Prices’’
Commission and any person, other than service, a service that the Exchange is
those that may be withheld from the
currently providing on a pilot test basis.
public in accordance with the
There is no new rule text.
provisions of 5 U.S.C. 552, will be
II. Self-Regulatory Organization’s
available for inspection and copying in
Statement of the Purpose of, and
the Commission’s Public Reference
Statutory Basis for, the Proposed Rule
Room, 100 F Street, NE., Washington,
Change
DC 20549, on official business days
between the hours of 10 a.m. and 3 p.m.
In its filing with the Commission, the
Copies of the filing also will be available self-regulatory organization included
for inspection and copying at the
statements concerning the purpose of,
principal office of the BSE. All
and basis for, the proposed rule change
comments received will be posted
and discussed any comments it received
without change; the Commission does
on the proposed rule change. The text
not edit personal identifying
of those statements may be examined at
information from submissions. You
the places specified in Item III below.
should submit only information that
The Exchange has prepared summaries,
you wish to make available publicly. All set forth in sections A, B, and C below,
submissions should refer to File
of the most significant parts of such
Number SR–BSE–2008–43 and should
statements.
be submitted on or before September 30,
A. Self-Regulatory Organization’s
2008.
Statement of the Purpose of, and
For the Commission, by the Division of
Statutory Basis for, the Proposed Rule
Trading and Markets, pursuant to delegated
Change
22
authority.
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street, NE.,
Washington, DC 20549–1090.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8–20869 Filed 9–8–08; 8:45 am]
1. Purpose
In File No. SR–NYSE–2007–04 (the
‘‘NYSE Realtime Reference Prices
BILLING CODE 8010–01–P
1 15
22 17
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U.S.C. 78s(b)(1).
CFR 240.19b–4.
09SEN1
Agencies
[Federal Register Volume 73, Number 175 (Tuesday, September 9, 2008)]
[Notices]
[Pages 52434-52436]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-20869]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58445; File No. SR-BSE-2008-43]
Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Regarding Transfer of Ownership of MX U.S. 2, Inc.
August 29, 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 August 28, 2008, the Boston Stock Exchange, Inc. (``BSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in Items I and
II below, which Items have been substantially prepared by the BSE.\3\
The Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ Capitalized terms not otherwise defined herein shall have
the meanings set forth in the BOX LLC Agreement.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange is submitting the proposed rule change to the
Commission to amend the proposed Sixth Amended and Restated Operating
Agreement (``BOX LLC Agreement''), of the Boston Options Exchange Group
LLC (``BOX LLC''), in connection with the transfer by the
Montr[eacute]al Exchange Inc.,\4\ a company incorporated in
Qu[eacute]bec, Canada (``MX''), of its ownership interest in MX U.S. 2,
Inc., a U.S. subsidiary of MX (``MX U.S. 2'').\5\ The text of the
proposed rule change is available at the Exchange, the Commission's
Public Reference Room, and https://www.bostonstock.com.
---------------------------------------------------------------------------
\4\ The Montr[eacute]al Exchange Inc. is also known in French as
the Bourse de Montr[eacute]al Inc.
\5\ See Securities Exchange Act Release No. 58324 (August 7,
2008), 73 FR 46936 (August 12, 2008) (SR-BSE-2008-25).
---------------------------------------------------------------------------
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 proposal. The text of these
statements
[[Page 52435]]
may be examined at the places specified in Item IV below. The BSE has
prepared summaries, set forth in Sections A, B, and C below, of the
most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
On January 13, 2004, the Commission approved four BSE proposals
that together established, through an operating agreement among its
owners, a Delaware limited liability company, BOX LLC, to operate BOX
as an options trading facility of the Exchange.\6\ MX owns a 100%
ownership interest in MX U.S. 2, which holds a 31.37% ownership
interest in BOX LLC.\7\ MX has transferred 100% of its common stock
ownership interest in MX U.S. 2 to MX U.S. 1, Inc., a wholly owned U.S.
subsidiary of MX (``MX U.S. 1'') (``Common Stock Transfer''). 3226507
Nova Scotia Company, a Nova Scotia, Canada unlimited liability company,
a subsidiary of MX (``NSULC 2''), has also acquired 100% of the
preferred stock of MX U.S. 2 (``Preferred Stock Transfer''). NSULC 2 is
a direct subsidiary of MX and 3226506 Nova Scotia Company, a Nova
Scotia, Canada unlimited liability company and a wholly owned
subsidiary of MX (``NSULC 1''). Furthermore, NSULC 1 has acquired 0.1%
of the common stock of NSULC 2 (``NSULC 2 Transfer'' and collectively
with the Common Stock Transfer and the Preferred Stock Transfer, the
``Transfers'').
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 49066 (January 13,
2004), 69 FR 2773 (January 20, 2004) (establishing a fee schedule
for the proposed BOX facility); Securities Exchange Act Release No.
49065 (January 13, 2004), 69 FR 2768 (January 20, 2004) (creating
Boston Options Exchange Regulation LLC to which the BSE would
delegate its self-regulatory functions with respect to the BOX
facility); Securities Exchange Act Release No. 49068 (January 13,
2004), 69 FR 2775 (January 20, 2004) (approving trading rules for
the BOX facility); Securities Exchange Act Release No. 49067
(January 13, 2004), 69 FR 2761 (January 20, 2004) (approving certain
regulatory provisions of the operating agreement of BOX LLC).
\7\ Upon the consummation of the Exchange's transfer of its
21.87% ownership interest in BOX to MX U.S. 2, MX U.S. 2 will hold a
53.24% ownership interest in BOX (``BSE Transfer''). See Securities
Exchange Act Release No. 58324 (August 7, 2008), 73 FR 46936 (August
12, 2008) (SR-BSE-2008-25).
---------------------------------------------------------------------------
The Exchange is submitting the proposed rule change to the
Commission to amend the BOX LLC Agreement pursuant to the proposed
Instruments of Accession in connection with the Transfers. As a result
of the Transfers, MX U.S. 2 is a direct subsidiary of MX U.S. 1 and
NSULC 2.
Pursuant to section 8.4(g) of the BOX LLC Agreement, as previously
approved by the Commission, BOX LLC is required to amend the BOX LLC
Agreement to make a Controlling Person\8\ a party to the BOX LLC
Agreement if such Controlling Person establishes a Controlling
Interest\9\ in any BOX Member that, alone or together with any
Affiliate of such BOX Member, holds a Percentage Interest in BOX equal
to or greater than 20%.\10\ Pursuant to the Common Stock Transfer and
the Preferred Stock Transfer, MX U.S. 1 and NSULC 2 have acquired a
Controlling Interest in MX U.S. 2, which owns a 31.37% ownership
interest in BOX LLC and will own a 53.24% ownership interest in BOX LLC
upon the consummation of the BSE Transfer. MX U.S. 1 and NSULC 2, as
Controlling Persons, are required to and will become parties to the BOX
LLC Agreement pursuant to the proposed Instruments of Accession.
Furthermore, NSULC 1, which acquired 0.1% of the common stock ownership
interest in NSULC 2, a direct subsidiary of MX that holds an ownership
interest in 100% of the preferred shares of MX U.S. 2 that holds and
will hold an interest in BOX that is greater than twenty percent of all
outstanding BOX ownership interests, is also required to and will
become a party to the BOX LLC Agreement. As a result, MX U.S. 1, NSULC
1 and NSULC 2 will agree to abide by all the provisions of the BOX LLC
Agreement, including those provisions requiring submission to the
jurisdiction of the Commission.\11\
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\8\ A ``Controlling Person'' is defined as ``a Person who, alone
or together with any Affiliate of such Person, holds a controlling
interest in a [BOX] Member.'' See Section 8.4(g)(v)(B), BOX LLC
Agreement.
\9\ A ``Controlling Interest'' is defined as ``the direct or
indirect ownership of 25% or more of the total voting power of all
equity securities of a Member (other than voting rights solely with
respect to matters affecting the rights, preferences, or privileges
of a particular class of equity securities), by any Person, alone or
together with any Affiliate of such Person.'' See Section
8.4(g)(v)(A), BOX LLC Agreement.
\10\ See Section 8.4(g), BOX LLC Agreement.
\11\ The BOX LLC states, in part, that ``the Members, officers,
directors, agents, and employees of Members irrevocably submit to
the exclusive jurisdiction of the U.S. federal courts, U.S.
Securities and Exchange Commission, and the Boston Stock Exchange,
for the purposes of any suit, action or proceeding pursuant to U.S.
federal securities laws, the rules or regulations thereunder,
arising out of, or relating to, BOX activities or Article 19.6(a),
(except that such jurisdictions shall also include Delaware for any
such matter relating to the organization or internal affairs of BOX,
provided that such matter is not related to trading on, or the
regulation, of the BOX Market), and hereby waive, and agree not to
assert by way of motion, as a defense or otherwise in any such suit,
action or proceeding, any claims that they are not personally
subject to the jurisdiction of the U.S. Securities and Exchange
Commission, that the suit, action or proceeding is an inconvenient
forum or that the venue of the suit, action or proceeding is
improper, or that the subject matter hereof may not be enforced in
or by such courts or agency.'' See BOX LLC Agreement, Section 19.6.
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For the reasons stated above, the BSE is submitting to the
Commission the proposed Instruments of Accession to the BOX LLC
Agreement as a rule change.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the
requirements of section 6(b) of the Act,\12\ in general, and furthers
the objectives of section 6(b)(1),\13\ in particular, in that it
enables the Exchange to be so organized so as to have the capacity to
be able to carry out the purposes of the Act and to comply, and to
enforce compliance by its exchange members and persons associated with
its exchange members, with the provisions of the Act, the rules and
regulations thereunder, and the rules of the Exchange. The Exchange
also believes that this filing furthers the objectives of section
6(b)(5) of the Act\14\ in that it is designed to facilitate
transactions in securities, 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 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.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
\14\ 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. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (i)
Significantly affect the protection of investors or the public
[[Page 52436]]
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, it has become
effective pursuant to section 19(b)(3)(A) of the Act\15\ and Rule 19b-
4(f)(6) thereunder.\16\
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\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) normally may
not become operative prior to 30 days after the date of filing.\17\
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a
shorter time if such action is consistent with the protection of
investors and the public interest.\18\ The Exchange has requested that
the Commission waive the 5-day pre-filing requirement and the 30-day
operative delay.\19\ The Commission believes that waiving the 5-day
pre-filing requirement and the 30-day operative delay is consistent
with the protection of investors and the public interest because BSE
has represented that the Instruments of Accession will be executed on
August 29, 2008, and there is no reason to delay implementation of the
changes to the BOX LLC Agreement pursuant to the Instruments of
Accession. For these reasons, the Commission designates the proposal to
be operative upon filing with the Commission.\20\
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\17\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the
Commission notice of its intent to file the proposed rule change,
along with a brief description and text of the proposed rule change,
at least five business days prior to the date of filing of the
proposed rule change, or such shorter time as designated by the
Commission.
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ See Email from Lisa J. Fall, General Counsel and Corporate
Secretary, BOX, to Molly Kim, Special Counsel, Division of Trading
and Markets, Commission, on August 29, 2008.
\20\ For purposes only of waiving the 30-day operative delay,
the Commission has considered the proposed rule's impact on
efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
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At any time within 60 days of the filing of the 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.\21\
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\21\ See 15 U.S.C. 78s(b)(3)(C).
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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-2008-43 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BSE-2008-43. 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 the 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-2008-43 and should be
submitted on or before September 30, 2008.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-20869 Filed 9-8-08; 8:45 am]
BILLING CODE 8010-01-P