Document ID: SEC-2006-0877-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2006-07-10T04:00Z

[Federal Register: July 10, 2006 (Volume 71, Number 131)]
[Notices]               
[Page 38913-38914]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10jy06-90]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54082; File No. SR-BSE-2006-29]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto to Extend the Effective Date of a Previous 
Rule Change Relating to Information Contained in a Directed Order on 
the Boston Options Exchange

June 30, 2006.
     Pursuant to section 19(b)(1) of the Securities Exchange Act of 
1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby 
given that on June 20, 2006, 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 BSE. The BSE filed the 
proposed rule change pursuant to section 19(b)(3)(A) of the Act \3\ and 
Rule 19b-4(f)(6) thereunder,\4\ which renders the proposed rule change 
effective upon filing with the Commission. On June 29, 2006, the BSE 
filed Amendment No. 1 to the proposed rule change.\5\ The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as amended, from interested persons.
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    \1\ 5 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ In Amendment No. 1, BSE submitted rule text that indicates 
that the proposed rule change will expire on September 30, 2006.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    On March 17, 2006, the Exchange filed a proposed rule change to 
amend its rules governing its Directed Order process on Boston Stock 
Exchange, Inc. (``BOX'') pursuant to section 19(b)(3)(A) of the Act and 
Rule 19b-4(f)(6) thereunder, which rendered the proposal immediately 
effective upon filing with the Commission.\6\ The rules were amended to 
clearly state that the BOX Trading Host identifies to an Executing 
Participant (``EP'') the identity of the firm entering a Directed 
Order. The amended rule was to be effective until June 30, 2006, while 
the Commission considered a corresponding Exchange proposal, SR-BSE-
2005-52,\7\ to amend the BOX rules on a permanent basis to permit EPs 
to choose the firms from whom they will accept Directed Orders, while 
providing complete anonymity of the firm entering a Directed Order.\8\
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    \6\ See Securities Exchange Act Release No. 53516 (March 20, 
2006), 71 FR 15232 (March 27, 2006) (SR-BSE-2006-14). At the 
Exchange's request, the Commission edited language in this filing to 
clarify that the Commission did not approve SR-BSE-2006-14, but that 
SR-BSE-2006-14 became immediately effective upon filing with the 
Commission pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6) thereunder. Telephone conference between Jan Woo, Attorney, 
Division of Market Regulation, Commission, and Brian Donnelly, 
Assistant Vice President of Regulation and Compliance, BSE, on June 
27, 2006 (``Telephone conference'').
    \7\ See Securities Exchange Act Release No. 53357 (February 23, 
2006), 71 FR 10730 (March 2, 2006) (Notice of filing of Amendments 
No. 2, 3, and 4 to proposed rule change to modify the information 
contained in a Directed Order on the BOX).
    \8\ In the event that the issue of anonymity in the Directed 
Order process is not resolved by September 30, 2006, the Exchange 
intends to submit another filing under Rule 19b-4(f)(6) under the 
Act extending this rule and system process.
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    The Exchange now proposes to extend the effective date of the 
amended rule governing the anonymity of its Directed Order process on 
the BOX from June 30, 2006 to September 30, 2006 while the Commission 
continues to consider SR-BSE-2005-52 which would amend the BOX rules on 
a permanent basis to permit EPs to choose the firms from whom they will 
accept Directed Orders, while providing complete anonymity of the firm 
entering a Directed Order. In the event the Commission reaches a 
decision with respect to SR-BSE-2005-52 to amend the BOX rules before 
September 30, 2006, the amended rule governing the Exchange's Directed 
Order process on the BOX will cease to be effective at the time of that 
decision.
    This rule filing proposes to extend the effective date of the 
amended rule governing the Exchange's Directed Order process on the BOX 
from June 30, 2006 to September 30, 2006.

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 BSE 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 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 March 17, 2006 the BSE filed SR-BSE-2006-14, a proposed rule 
change seeking to amend the BOX rules to clearly state that the BOX 
Trading Host identifies to an EP the identity of the firm entering a 
Directed Order. That proposed rule change became immediately effective 
upon filing with the Commission pursuant to Rule 19b-4(f)(6) under the 
Act.\9\ The rule change was to be effective until June 30, 2006, while 
the Commission considered a corresponding Exchange proposal, SR-BSE-
2006-52, to amend the BOX rules on a permanent basis to permit EPs to 
choose the firms from whom they will accept Directed Orders while 
providing complete anonymity of the firm entering a Directed Order. 
This proposed rule filing seeks to extend the date of effectiveness of 
the amended Directed Order rule from June 30, 2006 to September 30, 
2006, while the

[[Page 38914]]

Commission considers SR-BSE-2005-52 to amend the BOX rules on a 
permanent basis to permit EPs to choose the firms from whom they will 
accept Directed Orders while providing complete anonymity of the firm 
entering a Directed Order.
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    \9\ See footnote 5 supra. Telephone conference.
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2. Statutory Basis
    The amended rule is designed to clarify the information contained 
in a Directed Order. This proposed rule filing seeks to extend the 
amended rule's effectiveness from June 30, 2006 to September 30, 2006. 
This extension will afford the Commission the necessary time to 
consider SR-BSE-2005-52 which would amend the BOX rules on a permanent 
basis to permit EPs to choose the firms from whom they will accept 
Directed Orders while providing complete anonymity of the firm entering 
a Directed Order. Accordingly, the Exchange believes that the proposal 
is consistent with the requirements of section 6(b) of the Act,\10\ in 
general, and section 6(b)(5) of the Act,\11\ in particular, in that it 
is designed to foster cooperation and coordination with persons engaged 
in regulating, clearing, settling, processing information with respect 
to, and facilitating transaction in securities, to remove impediments 
to and perfect the mechanism for a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest.
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    \10\ U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(5).
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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

    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, as amended: (1) Does 
not significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
section 19(b)(3)(A)\12\ of the Act and Rule 19b-4(f)(6) thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6)\14\ normally 
may not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii)\15\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The BSE requests that the Commission 
waive the 5-day pre-filing notice requirement and the 30-day operative 
delay, as specified in Rule 19b-4(f)(6)(iii),\16\ which would make the 
rule change effective and operative upon filing. The Commission 
believes that waiving the 5-day pre-filing notice and the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because such waiver would continue to conform the BOX 
rules with BOX's current practice and clarify that Directed Orders on 
BOX are not anonymous.\17\ Accordingly, the Commission designates that 
the proposed rule change effective and operative upon filing with the 
Commission.
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    At any time within 60 days of the filing of such 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.\18\
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    \18\ The effective date of the original proposed rule is June 
20, 2006. The effective date of Amendment No. 1 is June 29, 2006. 
For purposes of calculating the 60-day period within which the 
Commission may summarily abrogate the proposed rule change under 
Section 19(b)(3)(C) of the Act, the Commission considers the period 
to commence on June 29, 2006, the date on which the BSE submitted 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the amended 
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 No. SR-BSE-2006-29 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-BSE-2006-29. 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. Copies of such 
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-2006-29 and should be submitted on or before July 
31, 2006.
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    \19\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\19\
Nancy M. Morris,
Secretary.
 [FR Doc. E6-10721 Filed 7-7-06; 8:45 am]

BILLING CODE 8010-01-P