26908 Federal Register / Vol. 60, No. 97 / Friday, May 19, 1995 / Notices

1 15 U.S.C. 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1994).

3See letter from Karen Aluise, BSE, to Glen

Barrentine, SEC, dated May 9, 1995. In Amendment

No. 1 the BSE removed its request to expand the

pilot program by the number of securities, as well

as the number of specialists per issue. The

limitations imposed in the original approval order

will remain through the extension (maximum of

three specialists per stock; each specialist can

compete in a maximum of 20 stocks). Thus, during

the pilot program, the total number of stocks subject

to competition will not exceed 360.

4Non-specifically directed orders would be

routed to the regular specialist.

5The BEACON System will view all of the limits

on the various books as one centralized book for

purposes of order execution.

6See Securities Exchange Act Release No. 34078

(May 18, 1994), 59 FR 27082 (May 25, 1994); BSE

Rules Ch. XV §§ 18 and 6(iii).

7The Commission notes that this change was

made in the initial pilot and will carry forward

through the extension being approved herein.

For the Nuclear Regulatory Commission.

David H. Moran,

Acting Director, Project Directorate I–2,

Division of Reactor Projects—I/II, Office of

Nuclear Reactor Regulation.

[FR Doc. 95–12343 Filed 5–18–95; 8:45 am]

BILLING CODE 7590–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–35716; File No. SR–BSE–

95–07]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the Boston Stock

Exchange, Inc., Relating to Its

Competing Specialist Pilot Program

May 15, 1995.

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 May 5,

1995, 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 self-regulatory organization. On

May 9, 1995, the BSE filed Amendment

No. 1 with the Commission.3 The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The BSE seeks to extend the current

pilot program for competing specialists

on its floor until October 2, 1995.

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

self-regulatory organization 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 self-regulatory organization 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 extend the current pilot

program for competing specialists until

October 2, 1995. The program currently

provides for up to three competing

specialists in a stock on the floor of the

Exchange. The pilot program provides

for both a regular specialist and a

competing specialist(s) in a stock,

whereas currently there is only one

specialist in that stock. Orders can be

directed to either specialist based on

each customer’s independent decision,4

but all orders in that stock will be

executed in accordance with strict time

priority. Once all limits at a price level

are depleted, each specialist is

responsible for the market orders

directed to them specifically.

All limit orders entrusted to each

competing specialist and the regular

specialist will be represented and

executed strictly according to time

priority as to receipt of the order in the

BEACON System. Thus incoming

market and marketable limit orders will

automatically execute against limit

orders on the books according to the

order in which the limit orders were

received in the system.5 The regular

specialist will be responsible for

updating quotations; thus all

competitors must communicate their

markets to the regular specialist and be

responsible for their portion of the

published bid and/or offer. Openings

and reopenings shall be coordinated

through the regular specialist to ensure

they are unitary. All ITS activity must

be cleared through the regular specialist

and only the regular specialist can input

quotations to reflect the Boston market.

Thus to all other markets in the National

Market System, there will be only one

Boston market. Trading halts will also

be coordinated through the regular

specialist and any trading halt will

apply to all competitors in a stock.

The Exchange has adopted procedures

to provide guidelines for the pilot

program participants and for the

Exchange in its administration of the

program.6 Any new competitive

situation will be reviewed by the

Exchange for the duration of the pilot

program. Reports of specialists’ dealings

have been reviewed on a daily basis

since the inception of the program and

periodic reports have been provided to

the Commission for review. In addition,

the program was fully integrated into

the Exchange’s specialist performance

evaluation program beginning in

December 1994.

Certain technical changes necessitated

by the proposed pilot program have

been made to Chapter XV § 6 regarding

the specialist’s book to permit the

competing specialist to see a summary

of bids and offers at each price level in

the subject stock.7 This will enable all

competitors in a stock to know the

combined market in that stock.

2. Statutory Basis

The Exchange believes that the

proposed rule change is consistent with

Section 6(b)(5) of the Act in that it

furthers the objectives to promote just

and equitable principles of trade, to

foster cooperation and coordination

with persons engaged in regulating,

clearing, settling, processing

information with respect to, and

facilitating transactions in securities, to

remove impediments to and perfect the

mechanism of a free and open market

and a national market system, and in

general, to protect investors and the

public interest; and is not designed to

permit unfair discrimination between

customers, issuers, brokers, or dealers.

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

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.

Persons making written submissions

should file six copies thereof with the
Federal Register / Vol. 60, No. 97 / Friday, May 19, 1995 / Notices 26909

8 15 U.S.C. 78f(b)(5) (1988).

9The BSE competing specialist program is

limited by the following: (1) a competing specialist

may preference up to a maximum of 20 stocks; (2)

the number of competitors in any given stock is

limited to three (one regular specialist and two

competing specialists); (3) no payment for order

flow; and (4) no index arbitrage. The Commission

also notes that prior to the original approval order

the BSE represented that, during the pilot program,

the total number of stocks subject to competition

will not exceed 360. See Securities Exchange Act

Release No. 34078 (May 18, 1994), 59 FR 27082

(May 25, 1994).

10See Securities Exchange Act Release No. 34078

(May 18, 1994), 59 FR 27082 (May 25, 1995).

11See, File No. SR–CSE–95–03, Securities

Exchange Act Release No. 35448 (March 7, 1995),

60 FR 13493 (March 13, 1995). The comments

received on this proposal are available from the CSE

or the Commission. (See Section III, supra.)

12 15 U.S.C. 78s(b)(2) (1988).

13 17 CFR 200.30–3(a)(12) (1994).

1 15 U.S.C. 78s(b)(1) (1988).

2 17 CFR 240.19b–4 (1994).

Secretary, Securities and Exchange

Commission, 450 Fifth Street, NW.,

Washington, DC 20549. 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

Section, 450 Fifth Street, NW.,

Washington, DC 20549. Copies of such

filing will also be available for

inspection and copying at the principal

office of the BSE. All submissions

should refer to File No. SR–BSE–95–07

and should be submitted by [insert date

21 days of publication].

IV. Commission’s Findings and Order

Granting Accelerated Approval of

Proposed Rule Change

The Commission finds that the BSE’s

proposal to extend its preferencing pilot

program to October 2, 1995 is consistent

with the requirements of the Act and the

rules and regulations thereunder

applicable to a national securities

exchange. Specifically, the Commission

finds that the proposed rule change is

consistent with Section 6(b)(5) of the

Act 8 in that it will promote just and

equitable principles of trade and remove

impediments to and perfect the

mechanism of a free and open market

and a national market system. The pilot

is extended under the same conditions

set out in the original pilot approval

order.9

The Commission notes that pursuant

to its original pilot approval order, the

BSE was required to submit quarterly

data reports and a report analyzing such

data.10 The BSE has submitted data to

the Commission. In addition, the

Commission has received extensive

commentary on the Cincinnati Stock

Exchange’s (‘‘CSE’’) request for

permanent approval of its preferencing

pilot 11 that present issues similar to

those raised by the BSE pilot. In sum,

the Commission is reviewing the

comments and data submitted thus far,

and believes that due to the complexity

of the issues, and significant amount of

data, the preferencing pilot should be

extended to provide the Commission

with adequate time to more thoroughly

evaluate the data and the issues

involved in the filing for permanent

approval.

The Commission finds good cause for

approving the proposed rule change

prior to the thirtieth day after the date

of publication of notice of filing thereof

in the Federal Register. The

Commission believes that accelerated

approval of the proposal is appropriate

in order to avoid an unnecessary

interruption to the pilot while allowing

the Commission to continue to evaluate

the data.

It is therefore ordered, pursuant to

Section 19(b)(2) 12 that the proposed

rule change is hereby approved, and the

competing specialist pilot is extended

through October 2, 1995.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.13

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 95–12312 Filed 5–18–95; 8:45 am]

BILLING CODE 8010–01–M

SECURITY AND EXCHANGE

COMMISSION

[Release No. 34–35717; File No. SR–CSE–

95–06]

Self-Regulatory Organizations; Notice

of Filing and Order Granting

Accelerated Approval of Proposed

Rule Change by the Cincinnati Stock

Exchange, Inc. Relating to the

Preferencing of Public Agency Market

and Marketable Limit Orders by

Approved Dealers and Other

Proprietary Members

May 15, 1995.

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 May 1,

1995, the Cincinnati Stock Exchange,

Inc. (‘‘CSE’’ 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 self-regulatory

organization. The Commission is

publishing this notice to solicit

comments on the proposed rule change

from interested persons.

I. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The Cincinnati Stock Exchange, Inc.

(‘‘CSE’’ or ‘‘Exchange’’) hereby proposes

to extend the CSE’s pilot program

regarding preferencing until October 2,

1995. The pilot was initially approved

by the Commission on February 7, 1991

and is currently extended until May 18,

1995. (Securities Exchange Act Release

No. 28866).

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

self-regulatory organization 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 self-regulatory organization 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 rule filing is to

extend the existing pilot program of the

Exchange relating to the preferencing of

public agency market and marketable

limit orders by approved dealers and

other proprietary members until October

2, 1995. The Commission originally

approved the pilot on February 7, 1991,

(Securities Exchange Act Release No.

28866, 56 FR 5854 (Feb. 13, 1991)). The

Commission has subsequently extended

the pilot several times. (Securities

Exchange Act Release Nos. 29524 (Aug.

5, 1991), 56 FR 38160; 30353 (Feb. 7,

1992), 57 FR 5918; 31011 (Aug. 7, 1992),

57 FR 38704; 32280 (May 7, 1993), 58

FR 28422; 33975 (April 28, 1994), 59 FR

23243 and 34493 (Aug. 5, 1994)). The

Commission staff has requested the

Exchange seek a limited extension until

the October date.