70 FR 148 pgs. 44706-44707 - Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change to Extend the Linkage Fee Pilot Program
Type: NOTICEVolume: 70Number: 148Pages: 44706 - 44707
Docket number: [Release No. 34-52147; File No. SR-BSE-2005-28]
FR document: [FR Doc. E5-4124 Filed 8-2-05; 8:45 am]
Agency: Securities and Exchange Commission
Official PDF Version: PDF Version
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52147; File No. SR-BSE-2005-28]
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Notice of Filing and Order Granting Accelerated Approval of a Proposed Rule Change to Extend the Linkage Fee Pilot Program
July 28, 2005.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 ("Act"),1and Rule 19b-4 thereunder,2notice is hereby given that on July 27, 2005, the Boston Stock Exchange, Inc. ("BSE" or "Exchange") filed with the Securities and Exchange Commission ("Commission") the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons and is approving the proposal on an accelerated basis for a pilot period through July 31, 2006.
Footnotes:
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b-4.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The Exchange proposes to amend the fee schedule ("Fee Schedule") of the Boston Options Exchange, the options trading facility of the BSE ("BOX"), to extend until July 31, 2006, the current pilot program applicable to the option intermarket linkage ("Linkage") fees and to make some technical changes to the Fee Schedule. The text of the proposed fee schedule is available on the Exchange's Web site ( http://www.bostonstock.com ), at the offices of the Exchange, 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 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's fees for Principal ("P") and Principal Acting as Agent ("P/A") orders3executed on BOX currently operate under a pilot program scheduled to expire on July 31, 2005.4The Exchange proposes to extend the current pilot program for such Linkage fees through July 31, 2006. Currently, because all Linkage Orders received by BOX are for the account of a market maker on another exchange, the Linkage fees that are applicable to P and P/A Orders are the same as fees applicable to market makers on other exchanges that submit orders to BOX outside of the Linkage. The side of a BOX trade opposite an inbound P or P/A Order would be billed normally as any other BOX trade. Also, consistent with the Linkage Plan, no fees will be charged to a party sending a Satisfaction request ("S" order) to BOX. Rather, a fee will be charged to the BOX Options Participant that was responsible for the trade-through that caused the S order to be sent.
Footnotes:
3 Under Chapter XII of the BOX Rules, a "Linkage Order" means an Immediate or Cancel order routed through the Linkage. There are three types of Linkage Orders:
(i) "P/A Order," which is an order for the principal account of a Market Maker (or equivalent entity on another Participant Exchange that is authorized to represent Public Customer orders), reflecting the terms of a related unexecuted Public Customer order for which the specialist is acting as agent;
(ii) "P Order," which is an order for the principal account of a market maker (or equivalent entity on another Participant Exchange) and is not a P/A Order; and
(iii) "Satisfaction Order," which is an order sent through the Linkage to notify a Participant Exchange of a Trade-Through and to seek satisfaction of the liability arising from that Trade-Through.
4 See Securities Exchange Act Release No. 50124 (July 30, 2004), 69 FR 47963 (August 6, 2004) (SR-BSE 2004-32).
The Exchange believes that extending the Linkage fee pilot program until July 31, 2006 will give the Exchange and the Commission additional time and opportunity to evaluate the appropriateness of the Linkage fees.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent with Section 6(b) of the Act,5in general, and furthers the objectives of Section 6(b)(4) of the Act,6in particular, in that the proposed rule change provides for the equitable allocation of reasonable dues, fees, and other charges among its members and other persons using its facilities.
Footnotes:
5 15 U.S.C. 78f(b).
6 15 U.S.C. 78f(b)(4).
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange believes that the proposed rule change does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received comments on the proposed rule change.
III. 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 ( http://www.sec.gov/rules/sro.shtml ); or
• Send an e-mail to rule-comments@sec.gov. Please include File Number SR-BSE-2005-28 on the subject line.
Paper Comments
• Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549-9303.
All submissions should refer to File Number SR-BSE-2005-28. 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 ( http://www.sec.gov/rules/sro.shtml ). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. 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-2005-28 and should be submitted on or before August 24, 2005.
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 rules and regulations thereunder applicable to a national securities exchange,7and, in particular, the requirements of Section 6(b) of the Act8and the rules and regulations thereunder. The Commission finds that the proposed rule change is consistent with Section 6(b)(4) of the Act,9which requires that the rules of the Exchange provide for the equitable allocation of reasonable dues, fees and other charges among its members and other persons using its facilities. The Commission believes that the extension of the Linkage fee pilot until July 31, 2006 will give the Exchange and the Commission further opportunity to evaluate whether such fees are appropriate.
Footnotes:
7 In approving this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
8 15 U.S.C. 78f(b).
9 15 U.S.C. 78f(b)(4).
The Commission finds good cause, pursuant to Section 19(b)(2) of the Act,10for approving the proposed rule change prior to the thirtieth day after publication of notice thereof in the Federal Register . The Commission believes that granting accelerated approval of the proposed rule change will preserve the Exchange's existing pilot program for Linkage fees without interruption as the Exchange and the Commission further consider the appropriateness of Linkage fees.
Footnotes:
10 15 U.S.C. 78s(b)(2).
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,11that the proposed rule change (SR-BSE-2005-28) is hereby approved on an accelerated basis for a pilot period to expire on July 31, 2006.
Footnotes:
11 Id.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.12
Footnotes:
12 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4124 Filed 8-2-05; 8:45 am]
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