52434 Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / Notices 

11See 17 CFR 240.0–12 and Exchange Act Release 

No. 39624 (February 5, 1998), 63 FR 8101 (February 

18, 1998) (Commission Procedures for Filing 

Applications for Orders for Exemptive Relief 

Pursuant to Section 36 of the Exchange Act; Final 

Rule). 

12Exchange Act Release No. 49260 (February 17, 

2004), 69 FR 8500 (February 24, 2004). 

13See Exchange Act Release No. 49260 (February 

17, 2004), 69 FR 8500 (February 24, 2004). 

14See supra note 1. 

15 15 U.S.C. 78mm. 

16 17 CFR 200.30–3(a)(76). 

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

2 17 CFR 240.19b–4. 

3Capitalized terms not otherwise defined herein 

shall have the meanings set forth in the BOX LLC 

Agreement. 

4The Montre ́al Exchange Inc. is also known in 

French as the Bourse de Montre ́al Inc. 

5See Securities Exchange Act Release No. 58324 

(August 7, 2008), 73 FR 46936 (August 12, 2008) 

(SR–BSE–2008–25). 

(1) An SRO wishing to incorporate 

rules of another SRO by reference has 

submitted a written request for an order 

exempting it from the requirement in 

Section 19(b) of the Exchange Act to file 

proposed rule changes relating to the 

rules incorporated by reference, has 

identified the applicable originating 

SROs, together with the rules it wants 

to incorporate by reference, and 

otherwise has complied with the 

procedural requirements set forth in the 

Commission’s release governing 

procedures for requesting exemptive 

orders pursuant to Rule 0–12 under the 

Exchange Act;11

(2) an incorporating SRO has 

requested incorporation of categories of 

rules (rather than individual rules 

within a category) that are not trading 

rules (e.g., the SRO has requested 

incorporation of rules such as margin, 

suitability, arbitration); and 

(3) the incorporating SRO has 

reasonable procedures in place to 

provide written notice to its members 

each time a change is proposed to the 

incorporated rules of another SRO. 

The Commission believes that it is 

appropriate to issue an exemption, 

subject to the conditions described 

above, to allow Phlx to incorporate by 

reference the margin rules of the NYSE 

or CBOE (by allowing its members to 

elect to be bound by the margin rules of 

either the NYSE or CBOE), without 

being subject to the rule filing 

requirements of Section 19(b) of the 

Exchange Act whenever the SRO’s 

margin rules that are incorporated by 

reference change. The Commission 

believes that this exemption will 

promote more efficient use of 

Commission and Phlx resources by 

avoiding duplicative rule filings based 

on simultaneous changes to identical 

rule text sought by more than one SRO. 

The Commission notes in granting this 

exemption, that Phlx by incorporating 

by reference another SRO’s margin rules 

would agree to be governed by the 

incorporated rules, as amended from 

time to time, but not be required to file 

a separate proposed rule change with 

the Commission each time either the 

NYSE or CBOE seeks to modify its 

margin rules. 

Phlx is requesting to incorporate by 

reference the whole category of the 

NYSE and CBOE margin rules (i.e., did 

not ‘‘cherry-pick’’ certain individual 

rules within a category), which are 

regulatory rules and not trading rules. 

The Commission also has previously 

approved the incorporation by reference 

of the NYSE and CBOE margin rules for 

the International Securities Exchange 

and the Boston Options Exchange.12 The 

Commission notes that the Exchange 

previously requested, and the 

Commission granted, a request by Phlx 

to incorporate by reference, the NASD 

Code of Arbitration Procedure, subject 

to certain conditions.13 Consistent with 

the conditions attendant to its prior 

exemptive request, the Exchange has 

agreed to continue to provide written 

notice to its members whenever the 

NYSE or CBOE proposes a change to its 

margin rules.14 This procedure will 

provide Phlx members with notice of a 

proposed rule change that affects their 

interests, so that they would have the 

opportunity to comment on it. 

For the reasons discussed above, the 

Commission finds that the exemption is 

necessary or appropriate in the public 

interest, and is consistent with the 

protection of investors. 

Accordingly, it is ordered, pursuant to 

Section 36 of the Exchange Act,15 that 

Phlx, with respect to the margin rules of 

the NYSE and CBOE that Phlx proposes 

to incorporate by reference as specified 

above, and subject to the conditions 

described above, shall be exempt from 

rule filing requirements of Section 19(b) 

of the Exchange Act to the extent that 

Section 19(b) would otherwise require 

submission of a proposed rule change 

filing with the Commission. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.16

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–20809 Filed 9–8–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58445; File No. SR–BSE–

2008–43] 

Self-Regulatory Organizations; Boston 

Stock Exchange, Inc.; Notice of Filing 

and Immediate Effectiveness of 

Proposed Rule Change Regarding 

Transfer of Ownership of MX U.S. 2, 

Inc. 

August 29, 2008. 

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 August 

28, 2008, 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 substantially prepared by the 

BSE.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 Exchange is submitting the 

proposed rule change to the 

Commission to amend the proposed 

Sixth Amended and Restated Operating 

Agreement (‘‘BOX LLC Agreement’’), of 

the Boston Options Exchange Group 

LLC (‘‘BOX LLC’’), in connection with 

the transfer by the Montre ́al Exchange 

Inc.,4 a company incorporated in 

Que ́bec, Canada (‘‘MX’’), of its 

ownership interest in MX U.S. 2, Inc., 

a U.S. subsidiary of MX (‘‘MX U.S. 2’’).5

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 

proposal. The text of these statements 


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Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / Notices 52435 

6See Securities Exchange Act Release No. 49066 

(January 13, 2004), 69 FR 2773 (January 20, 2004) 

(establishing a fee schedule for the proposed BOX 

facility); Securities Exchange Act Release No. 49065 

(January 13, 2004), 69 FR 2768 (January 20, 2004) 

(creating Boston Options Exchange Regulation LLC 

to which the BSE would delegate its self-regulatory 

functions with respect to the BOX facility); 

Securities Exchange Act Release No. 49068 (January 

13, 2004), 69 FR 2775 (January 20, 2004) (approving 

trading rules for the BOX facility); Securities 

Exchange Act Release No. 49067 (January 13, 2004), 

69 FR 2761 (January 20, 2004) (approving certain 

regulatory provisions of the operating agreement of 

BOX LLC). 7Upon the consummation of the Exchange’s 

transfer of its 21.87% ownership interest in BOX to 

MX U.S. 2, MX U.S. 2 will hold a 53.24% 

ownership interest in BOX (‘‘BSE Transfer’’). See 

Securities Exchange Act Release No. 58324 (August 

7, 2008), 73 FR 46936 (August 12, 2008) (SR–BSE–

2008–25). 

8A ‘‘Controlling Person’’ is defined as ‘‘a Person 

who, alone or together with any Affiliate of such 

Person, holds a controlling interest in a [BOX] 

Member.’’ See Section 8.4(g)(v)(B), BOX LLC 

Agreement. 

9A ‘‘Controlling Interest’’ is defined as ‘‘the direct 

or indirect ownership of 25% or more of the total 

voting power of all equity securities of a Member 

(other than voting rights solely with respect to 

matters affecting the rights, preferences, or 

privileges of a particular class of equity securities), 

by any Person, alone or together with any Affiliate 

of such Person.’’ See Section 8.4(g)(v)(A), BOX LLC 

Agreement. 

10See Section 8.4(g), BOX LLC Agreement. 

11The BOX LLC states, in part, that ‘‘the 

Members, officers, directors, agents, and employees 

of Members irrevocably submit to the exclusive 

jurisdiction of the U.S. federal courts, U.S. 

Securities and Exchange Commission, and the 

Boston Stock Exchange, for the purposes of any 

suit, action or proceeding pursuant to U.S. federal 

securities laws, the rules or regulations thereunder, 

arising out of, or relating to, BOX activities or 

Article 19.6(a), (except that such jurisdictions shall 

also include Delaware for any such matter relating 

to the organization or internal affairs of BOX, 

provided that such matter is not related to trading 

on, or the regulation, of the BOX Market), and 

hereby waive, and agree not to assert by way of 

motion, as a defense or otherwise in any such suit, 

action or proceeding, any claims that they are not 

personally subject to the jurisdiction of the U.S. 

Securities and Exchange Commission, that the suit, 

action or proceeding is an inconvenient forum or 

that the venue of the suit, action or proceeding is 

improper, or that the subject matter hereof may not 

be enforced in or by such courts or agency.’’ See 

BOX LLC Agreement, Section 19.6. 

12 15 U.S.C. 78f(b). 

13 15 U.S.C. 78f(b)(5). 

14 15 U.S.C. 78f(b)(5). 

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 

On January 13, 2004, the Commission 

approved four BSE proposals that 

together established, through an 

operating agreement among its owners, 

a Delaware limited liability company, 

BOX LLC, to operate BOX as an options 

trading facility of the Exchange.6 MX 

owns a 100% ownership interest in MX 

U.S. 2, which holds a 31.37% 

ownership interest in BOX LLC.7 MX 

has transferred 100% of its common 

stock ownership interest in MX U.S. 2 

to MX U.S. 1, Inc., a wholly owned U.S. 

subsidiary of MX (‘‘MX U.S. 1’’) 

(‘‘Common Stock Transfer’’). 3226507 

Nova Scotia Company, a Nova Scotia, 

Canada unlimited liability company, a 

subsidiary of MX (‘‘NSULC 2’’), has also 

acquired 100% of the preferred stock of 

MX U.S. 2 (‘‘Preferred Stock Transfer’’). 

NSULC 2 is a direct subsidiary of MX 

and 3226506 Nova Scotia Company, a 

Nova Scotia, Canada unlimited liability 

company and a wholly owned 

subsidiary of MX (‘‘NSULC 1’’). 

Furthermore, NSULC 1 has acquired 

0.1% of the common stock of NSULC 2 

(‘‘NSULC 2 Transfer’’ and collectively 

with the Common Stock Transfer and 

the Preferred Stock Transfer, the 

‘‘Transfers’’). 

The Exchange is submitting the 

proposed rule change to the 

Commission to amend the BOX LLC 

Agreement pursuant to the proposed 

Instruments of Accession in connection 

with the Transfers. As a result of the 

Transfers, MX U.S. 2 is a direct 

subsidiary of MX U.S. 1 and NSULC 2. 

Pursuant to section 8.4(g) of the BOX 

LLC Agreement, as previously approved 

by the Commission, BOX LLC is 

required to amend the BOX LLC 

Agreement to make a Controlling 

Person8 a party to the BOX LLC 

Agreement if such Controlling Person 

establishes a Controlling Interest9 in any 

BOX Member that, alone or together 

with any Affiliate of such BOX Member, 

holds a Percentage Interest in BOX 

equal to or greater than 20%.10 Pursuant 

to the Common Stock Transfer and the 

Preferred Stock Transfer, MX U.S. 1 and 

NSULC 2 have acquired a Controlling 

Interest in MX U.S. 2, which owns a 

31.37% ownership interest in BOX LLC 

and will own a 53.24% ownership 

interest in BOX LLC upon the 

consummation of the BSE Transfer. MX 

U.S. 1 and NSULC 2, as Controlling 

Persons, are required to and will 

become parties to the BOX LLC 

Agreement pursuant to the proposed 

Instruments of Accession. Furthermore, 

NSULC 1, which acquired 0.1% of the 

common stock ownership interest in 

NSULC 2, a direct subsidiary of MX that 

holds an ownership interest in 100% of 

the preferred shares of MX U.S. 2 that 

holds and will hold an interest in BOX 

that is greater than twenty percent of all 

outstanding BOX ownership interests, is 

also required to and will become a party 

to the BOX LLC Agreement. As a result, 

MX U.S. 1, NSULC 1 and NSULC 2 will 

agree to abide by all the provisions of 

the BOX LLC Agreement, including 

those provisions requiring submission 

to the jurisdiction of the Commission.11

For the reasons stated above, the BSE 

is submitting to the Commission the 

proposed Instruments of Accession to 

the BOX LLC Agreement as a rule 

change. 

2. Statutory Basis 

The Exchange believes that the 

proposal is consistent with the 

requirements of section 6(b) of the 

Act,12 in general, and furthers the 

objectives of section 6(b)(1),13 in 

particular, in that it enables the 

Exchange to be so organized so as to 

have the capacity to be able to carry out 

the purposes of the Act and to comply, 

and to enforce compliance by its 

exchange members and persons 

associated with its exchange members, 

with the provisions of the Act, the rules 

and regulations thereunder, and the 

rules of the Exchange. The Exchange 

also believes that this filing furthers the 

objectives of section 6(b)(5) of the Act14

in that it is designed to facilitate 

transactions in securities, to prevent 

fraudulent and manipulative acts and 

practices, 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. 

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 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 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 


jlentini on PROD1PC65 with NOTICES
52436 Federal Register / Vol. 73, No. 175 / Tuesday, September 9, 2008 / Notices 

15 15 U.S.C. 78s(b)(3)(A). 

16 17 CFR 240.19b–4(f)(6). 

17 17 CFR 240.19b–4(f)(6)(iii). In addition, Rule 

19b–4(f)(6)(iii) requires the self-regulatory 

organization to give the Commission notice of its 

intent to file the proposed rule change, along with 

a brief description and text of the proposed rule 

change, at least five business days prior to the date 

of filing of the proposed rule change, or such 

shorter time as designated by the Commission. 

18 17 CFR 240.19b–4(f)(6)(iii). 

19See Email from Lisa J. Fall, General Counsel 

and Corporate Secretary, BOX, to Molly Kim, 

Special Counsel, Division of Trading and Markets, 

Commission, on August 29, 2008. 

20For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. 15 U.S.C. 78c(f). 

21See 15 U.S.C. 78s(b)(3)(C). 22 17 CFR 200.30–3(a)(12). 

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

2 17 CFR 240.19b–4. 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days from the date on 

which it was filed, or such shorter time 

as the Commission may designate if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to section 

19(b)(3)(A) of the Act15 and Rule 19b–

4(f)(6) thereunder.16

A proposed rule change filed under 

Rule 19b–4(f)(6) normally may not 

become operative prior to 30 days after 

the date of filing.17 However, Rule 19b–

4(f)(6)(iii) permits the Commission to 

designate a shorter time if such action 

is consistent with the protection of 

investors and the public interest.18 The 

Exchange has requested that the 

Commission waive the 5-day pre-filing 

requirement and the 30-day operative 

delay.19 The Commission believes that 

waiving the 5-day pre-filing requirement 

and the 30-day operative delay is 

consistent with the protection of 

investors and the public interest 

because BSE has represented that the 

Instruments of Accession will be 

executed on August 29, 2008, and there 

is no reason to delay implementation of 

the changes to the BOX LLC Agreement 

pursuant to the Instruments of 

Accession. For these reasons, the 

Commission designates the proposal to 

be operative upon filing with the 

Commission.20

At any time within 60 days of the 

filing of the 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 furtherance of the 

purposes of the Act.21

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 rulecomments@sec.gov. Please include File 

Number SR–BSE–2008–43 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Secretary, Securities and Exchange 

Commission, 100 F Street, NE., 

Washington, DC 20549–1090. 

All submissions should refer to File 

Number SR–BSE–2008–43. 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 the 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–2008–43 and should 

be submitted on or before September 30, 

2008. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.22

Florence E. Harmon, 

Acting Secretary. 

[FR Doc. E8–20869 Filed 9–8–08; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–58443; File No. SR–NYSE–

2008–79] 

Self-Regulatory Organizations; New 

York Stock Exchange LLC; Notice of 

Filing and Order Granting Accelerated 

Approval of Proposed Rule Change to 

Reduce the Monthly Fee for NYSE 

Realtime Reference Prices 

August 29, 2008. 

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 August 

28, 2008, the New York Stock Exchange 

LLC (the ‘‘NYSE’’ or the ‘‘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 Exchange. The 

Commission is publishing this notice to 

solicit comments on the proposed rule 

change from interested persons, and is 

approving the proposal on an 

accelerated basis. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to reduce the 

fixed monthly fee that applies to its 

‘‘NYSE Realtime Reference Prices’’

service, a service that the Exchange is 

currently providing on a pilot test basis. 

There is no new rule text. 

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 those 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 parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

In File No. SR–NYSE–2007–04 (the 

‘‘NYSE Realtime Reference Prices 


jlentini on PROD1PC65 with NOTICES