[Federal Register: August 3, 2007 (Volume 72, Number 149)]
[Notices]
[Page 43302-43303]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03au07-105]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-56167; File No. SR-BSE-2007-33]
Self-Regulatory Organizations; Boston Stock Exchange, Inc.;
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change as Modified by Amendment No. 1 To Extend the Linkage Fee
Pilot Program
July 30, 2007.
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 July 9, 2007, 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 Exchange. On July 25, 2007, the
Exchange filed Amendment No. 1 to the proposed rule change. This order
provides notice of the proposed rule change, as modified by Amendment
No. 1, and approves the proposed rule change, as amended, 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 BSE proposes to amend the Fee Schedule of the Boston Options
Exchange (``BOX''), the options trading facility of the BSE, to extend
until July 31, 2008, the current pilot program applicable to the
options intermarket linkage (``Linkage'') fees and to make some
technical changes to the Fee Schedule. The text of the proposed rule
change is available at the Exchange, the Commission's Public Reference
Room, and http://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 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'') Orders \3\ executed on BOX currently operate under a
pilot program scheduled to expire on July 31, 2007.\4\ The BSE proposes
to extend the current pilot program for such Linkage fees through July
31, 2008. Because all Linkage Orders received by BOX are for the
account of a market maker on another exchange, Linkage fees that are
applicable to P Orders and P/A Orders are the same as fees applicable
to market makers on other exchanges that submit orders to BOX outside
of Linkage. The side of a BOX trade opposite a P Order or P/A Order
would be billed normally as any other BOX trade. Consistent with the
Plan for the Purpose of Creating and Operating Linkage, no fees will be
charged to a party sending a Satisfaction Order to BOX. Rather, a fee
will be
[[Page 43303]]
charged to the BOX Options Participant that was responsible for the
trade-through that caused the Satisfaction Order to be sent.
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\3\ Under Chapter XII, Section 1(j) of the BOX Rules, a
``Linkage Order'' means an Immediate or Cancel order routed through
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 Market Maker 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
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. 54225 (July 27,
2006), 71 FR 44056 (August 3, 2006) (SR-BSE 2006-26).
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The BSE believes that extending the Linkage fee pilot program until
July 31, 2008 will give the Exchange and the Commission additional time
and opportunity to evaluate the appropriateness of Linkage fees.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with section 6(b) of the Act,\5\ in general, and furthers the
objectives of section 6(b)(4) of the Act,\6\ in 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.
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\5\ 15 U.S.C. 78f(b).
\6\ 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. 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-2007-33 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-BSE-2007-33. 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 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-2007-33 and should be
submitted on or before August 24, 2007.
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,\7\ and, in particular, the requirements of section 6(b) of
the Act \8\ and the rules and regulations thereunder. The Commission
finds that the proposed rule change is consistent with section 6(b)(4)
of the Act,\9\ which 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, 2008 will give the Exchange and the Commission further
opportunity to evaluate whether such fees are appropriate.
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\7\ In approving this rule change, the Commission notes that it
has considered the proposal's impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
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The Commission also finds good cause for approving the proposed
rule change prior to the 30th day after the date of publication of the
notice of filing 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 continue
considering the appropriateness of Linkage fees.
Therefore, the Commission finds good cause, consistent with section
19(b)(2) of the Exchange Act,\10\ to approve the proposed rule change
on an accelerated basis.
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\10\ 15 U.S.C. 78s(b)(2).
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V. Conclusion
It is therefore ordered, pursuant to section 19(b)(2) of the
Act,\11\ that the proposed rule change (SR-BSE-2007-33), as modified by
Amendment No. 1, be, and it hereby is, approved on an accelerated
basis.
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\11\ 15 U.S.C. 78s(b)(2).
\12\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
Nancy M. Morris,
Secretary.
[FR Doc. E7-15095 Filed 8-2-07; 8:45 am]
BILLING CODE 8010-01-P