[Federal Register Volume 60, Number 90 (Wednesday, May 10, 1995)]
[Notices]
[Pages 24935-24936]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-11447]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-35669; File No. SR-BSE-95-04]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Order 
Granting Approval to Proposed Rule Change Relating to the Permanent 
Approval of BEACON Subscriber Credits

May 3, 1995.
    On February 13, 1995, the Boston Stock Exchange, Inc. (``BSE'' or 
``Exchange'') submitted to the Securities and Exchange Commission 
(``SEC'') or ``Commission''), pursuant to Section 19(b)(1) of the 
Securities Exchange Act of 1934 (``Act'')\1\ and Rule 19b-4 
thereunder,\2\ a proposed rule change seeking permanent approval of the 
BEACON subscriber credits. On March 13, 1995, the Exchange submitted to 
the Commission Amendment No. 1 to the proposed rule change,\3\ and on 
March 23, 1995, the Exchange submitted Amendment No. 2 to the proposed 
rule change.\4\

    \1\15 U.S.C. 78s(b)(1) (1988).
    \2\17 CFR 240.19b-4 (1994).
    \3\See letter from Karen Aluise, Assistant Vice President, BSE, 
to Jennifer Choi, Attorney, Division of Market Regulation, SEC, 
dated March 9, 1995. Amendment No. 1 corrected Exhibit 2 by 
referencing the BEACON subscriber Credits as the fee being amended 
and deleting unnecessary language.
    \4\See letter from Karen Aluise, Assistant Vice President, BSE, 
to Jennifer Choi, Attorney, Division of Market Regulation, SEC, 
dated March 22, 1995. Amendment No. 2 corrected Exhibit 2 by moving 
the phrase ``all trades accumulate for volume discounts'' below the 
schedule of volume discounts.
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    The proposed rule change, including Amendment Nos. 1 and 2, was 
published for comment in Securities Exchange Act Release No. 35529 
(Mar. 23, 1995), 60 FR 16216 (Mar. 29, 1995). No comments were received 
on the proposal.\5\

    \5\After the Commission published the proposed rule change for 
comment, the Exchange, pursuant to Section 19(b)(3)(A) of the Act, 
filed a rule change further amending the language of the portion of 
its fee schedule entitled ``Transaction Fees'' that relate to trade 
recording and comparison charges, which is the subject of the 
current filing. See Securities Exchange Act Release No. 35630 (Apr. 
19, 1995) 60 FR 20541 (Apr. 26, 1995) (noticing the filing and 
immediate effectiveness of the proposed rule change). Although the 
changes made by the filing did not affect the substance of this 
proposed rule change, they did alter the text of the proposed rule 
change as attached in Exhibit 2 of the BSE's filing. See File No. 
SR-BSE-95-04.
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    The Exchange seeks to obtain permanent approval of a portion of its 
fee schedule that provides credits of $.25 per trade to all non-self-
directed, electronically routed, Exchange executed trades. The 
aggregate credit per firm is limited to the total monthly layoff 
transaction fees charged to that firm.\6\ For purposes of the per trade 
credit, ``non-self-directed'' means entered by a BEACON subscriber in a 
stock in which the routing firm has no affiliation with or financial 
interest in the specialist operation registered in such stock.

    \6\The layoff transaction fees refer to the trade recording and 
comparison charges incurred by a firm as a result of executing 
trades through layoff terminals on the floor of the Exchange. These 
terminals are firm proprietary systems that are integrated with the 
order routing system of the New York Stock Exchange (``NYSE'') and 
route orders directly to the NYSE. Telephone conversation with Karen 
Aluise and Ken Meeden, BSE, and Glen Barrentine and Jennifer S. 
Choi, SEC, on May 3, 1995.
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    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, and, in 
particular, with the [[Page 24936]] requirements of Section 6(b).\7\ 
The Commission believes that the proposed rule change is consistent 
with the Section 6(b)(4) requirements that the rules of an exchange 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and issuer and other persons using its 
facilities. Moreover, the Commission believes the proposal is 
consistent with the Section 6(b)(5) requirements that the rules of an 
exchange be designed to promote just and equitable principles of trade, 
to prevent fraudulent and manipulative acts, and, in general, to 
protect investors and the public interest. The Commission also believes 
the proposal is consistent with the Section 6(b)(8) requirements that 
the rules of the exchange do not impose any burden on competition not 
necessary or appropriate in furtherance of the purposes of the Act.

    \7\15 U.S.C. 78f(b) (1988 & Supp. v 1993).
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    The Commission believes that the proposal, which was designed to 
encourage routing order flow to the Exchange, is consistent with the 
requirements of the Act because the proposed rule change is adequately 
circumscribed by the limitation on the aggregate amount of credit that 
could be received and does not make executions off the Exchange 
prohibitively expensive. The Commission, however, will continue to 
review carefully all proposed rule changes, especially those governing 
fees and credits on fees, for consistency with, among other things, the 
requirements of Sections 6(b)(4), 6(b)(5), and 6(b)(8).
    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-BSE-95-04) is approved.

    \8\15 U.S.C. 78s(b)(2) (1988).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\

    \9\17 CFR 200.30-3(a)(12) (1994).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-11447 Filed 5-9-95; 8:45 am]
BILLING CODE 8010-01-M