Document ID: SEC-2007-1204-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2007-08-28T04:00Z

[Federal Register: August 28, 2007 (Volume 72, Number 166)]
[Notices]               
[Page 49335-49337]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28au07-152]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56299; File No. SR-BSE-2007-42]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Exchange Fees and Charges

August 22, 2007.
    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 15, 2007, 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, II, 
and III below, which Items have been substantially prepared by the 
Exchange. The Exchange filed the proposal pursuant to section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ 
which renders the proposal effective upon filing with the Commission. 
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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend the Minimum Activity Charge 
(``MAC'') contained in the Fee Schedule for the Boston Options Exchange 
(``BOX''). The Exchange proposes to add a seventh category to its MAC 
table for classes with an Options Clearing Corporation Average Daily 
Volume (``OCC ADV'') of less than 2,000 contracts. In addition, the 
Exchange proposes to make a clerical correction to the BOX Fee Schedule 
to rectify an inadvertent omission from a previous rule filing.\5\ The 
text of the proposed rule change is

[[Page 49336]]

available at BSE, the Commission's Public Reference Room, and http://www.bostonstock.com
.

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    \5\ See Securities Exchange Act Release No. 55197 (January 30, 
2007), 72 FR 5772 (February 7, 2007) (SR-BSE-2007-02) (seeking to 
change the month in which the MAC reclassifications are calculated 
from January to July, among other proposed changes).
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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 IV below. The Exchange 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 Exchange proposes to amend the MAC which is contained in the 
Fee Schedule for BOX. The MAC is currently determined using six 
``categories'' of options classes listed by BOX. The category for each 
class is determined by its total trading volume across all U.S. options 
exchanges as determined by Options Clearing Corporation data. The 
Exchange now proposes to change the OCC ADV of Category F from less 
than 5,000 contracts to an OCC ADV between 2,000 and 4,999 contracts. 
In addition, the Exchange proposes to establish a seventh category, 
Category G, for options with an OCC ADV of less than 2,000 contracts, 
which will charge a MAC of $90 per month.
    The purpose of establishing a seventh MAC category is to account 
for the effect that current market conditions have had on Market Maker 
participation in the less active options. In order to entice new and 
existing Market Makers to quote and trade in these less active classes, 
namely those trading with an OCC ADV of approximately 2,000 contracts 
or less, the Exchange believes it is necessary to adjust the Fee 
Schedule to better reflect the trading costs associated with those 
classes by applying a smaller MAC than what was previously charged for 
classes with an OCC ADV of less than 2,000 contracts.
    With a more stratified Fee Schedule, Market Makers will now have 
greater incentive to quote and trade in those relatively less active 
classes. Therefore, a modified MAC Category F and the reduced MAC for 
new Category G will encourage more Market Makers into these markets. 
The Exchange believes that the proposal should promote competition in 
the less actively traded classes. While the Exchange recognizes that 
the proposal may increase quote activity in such classes, the Exchange 
believes that the benefits to increased competition would outweigh any 
concerns relating to quote capacity. The Exchange further believes that 
it will not experience an adverse impact on quote capacity as a result 
of this proposal.
    In addition to refining the MAC Categories, the Exchange proposes 
to amend the BOX Fee Schedule to correct an inadvertent omission from a 
previous rule filing. The Exchange previously filed a proposed rule 
change to alter the month in which a class's OCC ADV category would be 
recalculated, from January to July.\6\ The text of that proposed rule 
change did not include all of the necessary edits to the BOX Fee 
Schedule, and the Exchange now proposes to correct this omission.
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    \6\ See id.
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2. Statutory Basis

    The Exchange believes that the proposal is consistent with the 
requirements of section 6(b) of the Act,\7\ in general, and furthers 
the objectives of section 6(b)(4) of the Act,\8\ in particular, which 
requires that an exchange provide for the equitable allocation of 
reasonable dues, fees, and other charges among its members and issuers 
and other persons using its facilities.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(4).
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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

    The foregoing proposed rule change has become effective pursuant to 
section 19(b)(3)(A)(ii) of the Act \9\ and Rule 19b-4(f)(2) \10\ 
thereunder, because it changes a fee imposed by the Exchange. 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.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \10\ 17 CFR 240.19b-4(f)(2).
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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 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-2007-42 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 No. SR-BSE-2007-42. 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 such filing will also be available for 
inspection and copying at the principal office of the Exchange. 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 No. SR-

[[Page 49337]]

BSE-2007-42 and should be submitted on or before September 18, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-16956 Filed 8-27-07; 8:45 am]

BILLING CODE 8010-01-P