[Federal Register Volume 65, Number 198 (Thursday, October 12, 2000)]
[Notices]
[Pages 60705-60706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-26114]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43394; File No. SR-BSE-00-13]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Boston Stock Exchange, Inc. Relating to Electronic 
Trading Permits for BEACON Remote Units

September 29, 2000.
    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 September 21, 2000, the Boston Stock Exchange, Inc. (``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 prepared by the Exchange. The Commission is publishing 
this notice to solicit comments on the proposed rule change from 
interested persons.
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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 seeks to add a paragraph to its rules regarding BEACON 
Remote specialists relating to Electronic Trading Permits (``ETP'') 
which will provide remote access to the BEACON trading system from 
remote locations using authorized terminals and related equipment. The 
text of the proposed rule change follows.

Chapter XXXIII

Boston Exchange Automated Communication Order-routing Network (BEACON)
BEACON Remote
    Sec. 9. * * *
Electronic Trading Permits (``ETP'')
    (o) Each remote BEACON terminal assigned and registered by the 
Exchange will require an ETP, and will be subject to the following:
    (1) Each approved Specialist unit may be authorized to trade up to 
200 issues.
    (2) Each Specialist unit must have at least one registered Exchange 
seat assigned to the approved specialist.
    a. A specialist may be authorized to obtain additional ETP's for 
qualified registered clerks to access BEACON in support of the 
Specialist unit.
    b. All specialists and registered clerk ETP holders must be 
approved by the Market Performance Committee and must meet the 
following:
    i. file an ETP application form with the BSE Surveillance 
Department;
    ii. completion of the required floor training program*;
    iii. successful completion of the BSE floor examination with 90 
days of application (unless waived by the Exchange);
     iv. successful completion of the Series 63 (NASAA Uniform State 
Law Exam), and registration with the Commonwealth of Massachusetts, 
and;
    v. submission of fingerprint records to the BSE.
    (3) Each Specialist unit identified by the member firm will be 
assigned an account (``give up'') and will be evaluated under the 
Exchange's Specialist Performance Evaluation Program (``SPEP'') which 
currently measures performance in several separate categories 
comprising a relative overall performance ranking.
    * Training: On-site floor training for at least two weeks unless 
other arrangements are made with and approved by the Exchange, and will 
include, among other things:
    (1) Questioned trade procedures
    (2) Communication procedures with Floor Brokers, Front Desk 
Operations, Surveillance, Systems Support, and ITS coordination with 
the Floor.
    (3) Competing Specialist Initiative (``CSI'') and Unlisted Trading 
Privilege (``UTP'') applications and procedures
    (4) Stock allocation procedures
    (5) Book or symbol change procedures
    (6) Trading Halt procedures
    (7) Floor official rulings
    (8) Authorizations required for billing, withdrawals, and payment 
of fines where applicable
    (9) Minor Rule Plan Violations policies and application
    (10) Books and records/reports available
    (11) Explanation of the SPEP categories and procedures
    (12) Certain other rules and policies deemed appropriate by the 
Exchange (e.g. Limit Order Display Rule, auto-executions, Price 
Improvement, etc.)

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 
Section A, B, and C below, of the most significant aspects of such 
statments.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    The Exchange proposes to add paragraph (o) to Chapter XXXIII, 
Section 9, BEACON Remote, to require and establish guidelines for 
Electronic Trading Permits (``ETP'') for remote specialist operations. 
Each BEACON Remote terminal will be individually identified and 
associated with (an) authorized and qualified specialist(s) and/or 
registered clerk(s). The Exchange will specifically authorize and 
approve each ETP based on certain qualifications. Each ETP will provide 
remote access to the BEACON system from remote locations using 
authorized terminals and related equipment.
    The Exchange states that remote specialists and associated 
registered clerks with ETP's, like current BSE floor specialist units, 
will receive orders, commitments over the Intermarket Trading system 
(``ITS'') and administrative messages through the BEACON system. The 
existing Exchange systems and rules will support remote specialists as 
they currently support the physical trading floor. All executions 
occurring within BEACON, whether

[[Page 60706]]

conducted on the floor or electronically from remote locations, will be 
considered to be executions occurring on the Exchange.
2. Statutory Basis
    The statutory basis for the proposed rule change is Section 6(b)(5) 
of the Act,\3\ in that it is designed to promote just and equitable 
principles of trade, to foster cooperation and coordination with 
persons engaged in regulating securities transactions, to remove 
impediments, to perfect the mechanism of a free and open market and a 
national market system and, in general, to protect investors and the 
public interest. In addition, the Exchange believes that the proposed 
rule change is consistent with the provisions of Section 11A(a)(1)(B) 
of the Act,\4\ in that it pertains to new data processing and 
communications techniques which create the opportunity for more 
efficient and effective market operations.
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    \3\ 15 U.S.C. 78f(b)(5).
    \4\ 15 U.S.C. 78k(a)(1)(B).
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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 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

    No written comments were either solicited or received.

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 if it finds such longer period to be 
appropriate and publishes it reasons for so finding or (ii) as to which 
the self-regulatory organization consents, the Commission will:
    (1) by order approve such proposed rule change, or
    (2) 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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 
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 at the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
above-mentioned self-regulatory organization. All submissions should 
refer to file number SR-BSE-00-13 and should be submitted by November 
2, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-26114 Filed 10-11-00; 8:45 am]
BILLING CODE 8010-01-M