[Federal Register: September 13, 2007 (Volume 72, Number 177)]
[Notices]
[Page 52401-52403]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13se07-88]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56371; File No. SR-BSE-2007-43]
Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change,
as Modified by Amendment No. 1, Relating to Exchange Fees and Charges
September 7, 2007.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given
that on August 31, 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 substantially prepared by the BSE.
On September 6, 2007, the BSE submitted Amendment No. 1 to the proposed
rule change. The BSE has designated this proposal as one establishing
or changing a due, fee, or other charge imposed by the BSE under
Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2)
thereunder,\4\ which renders the proposal effective upon filing with
the Commission. The Commission is publishing this notice to solicit
comments on the proposed rule change, as amended, from interested
persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The BSE proposes to amend the Boston Options Exchange (``BOX'') Fee
Schedule in order to revise certain transaction fees for issues that
trade as part of the Penny Pilot Program.\5\
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\5\ See Securities Exchange Act Release No. 55155 (January 23,
2007) 72 FR 4741 (February 1, 2007) (SR-BSE-2006-49) (``Original
Penny Pilot Program Approval Order''). See also Securities Exchange
Act Release No. 56149 (July 26, 2007), 72 FR 42450 (August 2, 2007)
(SR-BSE-2007-38).
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[[Page 52402]]
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 BSE included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. 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 the proposed rule change is to revise the existing
BOX Fee Schedule in conjunction with the Penny Pilot Program. The
Exchange plans to introduce the Make or Take pricing structure for all
classes contained in the Penny Pilot Program.\6\ The Exchange is
proposing to amend the BOX Fee Schedule in order to make the following
changes to certain fees and charges that are assessed to Participants
in the issues referenced below, effective as of the first trading day
of September 2007.\7\
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\6\ The Original Penny Pilot Program Approval Order, supra note
5, lists the initial thirteen options classes currently
participating in the Penny Pilot Program. If the Penny Pilot Program
is expanded to introduce more participating options classes, the
Make or Take Pricing model will also apply to those options classes.
Furthermore, if the Penny Pilot Program is extended, the Make or
Take Pricing model will also be extended accordingly.
\7\ Participating classes are listed in Section 33 to Chapter V
of the BOX Rules.
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Transaction Fees for Classes Contained in the Penny Pilot
The Exchange is proposing to implement a Liquidity Make or Take
pricing structure for executed transactions in issues participating in
the Penny Pilot Program. Under the proposed Fee Schedule change, orders
that add or ``make'' liquidity to the BOX Book will receive a
transaction credit upon execution. BOX Market Makers will receive a
credit of $0.30 per contract. All other Participants will receive a
credit of $0.25 per contract. Any order, including an order with a Fill
and Kill designation, which executes against an order which is being
exposed before being placed on the BOX Book, will be deemed to be
making liquidity and will receive a transaction credit upon execution.
The Transaction Fee for all Participants that ``take'' liquidity
from the BOX Book will be $0.45 per contract. This fee will be applied
to all Participants, including Market Makers, Broker-Dealers and
Executing Participants executing orders on behalf of Public Customers.
Any order, including an order with a Fill and Kill designation, which
takes liquidity by trading immediately upon entry to the BOX Book or
following its exposure as part of NBBO filtering will be assessed the
$0.45 per contract fee.
Linkage Fees
Linkage Orders executed at BOX are subject to the same billing
treatment as other Broker-Dealer orders. Since Linkage Orders that are
sent to and executed on BOX will be taking liquidity, these orders will
be assessed a $0.45 per contract fee. Linkage Orders that are not
executed upon receipt are rejected back to the sender and are never
posted in the BOX Book. Therefore, a Linkage Order would never be
eligible to receive a credit of the Transaction Fee.
MAC and Mini MAC Exemption
No MAC or MiniMAC fees will be charged for classes contained in the
Liquidity Make or Take pricing structure. In addition, the trades in
these classes will not count toward the calculation of Average Daily
Volume rebates for BOX Market Makers.
Transactions Exempted From the Liquidity Make or Take Model
The following transactions will be exempt from the Liquidity Make
or Take pricing structure as they are deemed to neither take nor make
liquidity: Transactions which occur on the opening or re-opening of
trading and transactions on both sides of a PIP, with the exception of
unrelated orders that interact with an Improvement Auction, which will
be charged a ``take'' fee. Transactions which are exempt from the
Liquidity Make or Take pricing structure will be subject to standard
transaction fees as stated in the Fee Schedule.
2. Statutory Basis
BSE believes that the proposed rule change is consistent with
Section 6(b) of the Act,\8\ in general, and furthers the objectives of
Section 6(b)(4) of the Act,\9\ in particular, in that it is designed to
provide for the equitable allocation of dues, fees and other charges
among its members and issuers and other persons using its facilities.
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\8\ 15 U.S.C. 78f(b)
\9\ 15 U.S.C. 78f(b)(4).
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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
result in 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. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) of the Act \10\ and subparagraph (f)(2) of Rule 19b-4 \11\
thereunder because it establishes or changes a due, fee or other charge
imposed by the Exchange. At any time within 60 days of the filing of
such proposed rule change, the Commission may summarily abrogate such
rule change if it appears to the Commission that such action is
necessary or appropriate in the public interest, for the protection of
investors, or otherwise in the furtherance of the purposes of the
Act.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A)
\11\ 17 CFR 240.19b-4(f)(2)
\12\ For purposes of calculating the 60-day period within which
the Commission may summarily abrogate the proposed rule change under
Section 19(b)(3)(C) of the Act, the Commission considers the period
to commence on September 6, 2007, the date on which the BSE filed
Amendment No. 1. 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 http://www.sec.gov/rules/sro.shtml.
; or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-BSE-2007-43 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission,
[[Page 52403]]
100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-BSE-2007-43. 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 (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, 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-2007-43 and should be
submitted on or before October 4, 2007.
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\13\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-18076 Filed 9-12-07; 8:45 am]
BILLING CODE 8010-01-P