Document ID: SEC-2007-0732-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2007-05-23T04:00Z

[Federal Register: May 23, 2007 (Volume 72, Number 99)]
[Notices]               
[Page 29020-29022]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23my07-104]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55773; File No. SR-BSE-2007-16]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Allow Odd-lot and Mixed-lot Orders To Be Sent To the Boston Equities 
Exchange

May 16, 2007.
    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 April 17, 2007, the Boston Stock Exchange, Inc. (``BSE'' or 
``Exchange'') filed with the Securities and Exchange Commission (the 
``Commission'') the proposed rule change as described in Items I and II 
below, which Items have been substantially prepared by the BSE. The 
Exchange filed the proposal as a ``non-controversial'' proposed rule 
change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and Rule 
19b-4(f)(6) thereunder,\4\ which renders it effective upon filing with 
the Commission.\5\ The Commission is publishing this notice to solicit 
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ The Exchange has asked the Commission to waive the 30- day 
operative delay required by Rule 19b-4(f)(6)(iii), 17 CFR 240.19b-
4(f)(6)(iii). See discussion infra Section III.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The BSE proposes amending Section 2 and 3 of Chapter XXXVII of the 
Rules of BSE (``BSE Rules'') to allow odd-lot and mixed-lot market or 
limit orders to be sent to the Boston Equities Exchange (``BeX''). The 
text of the proposed rule change is available at BSE, 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 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 those 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 parts of such 
statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and the 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    On June 13, 2006 the BSE filed Amendment No. 3 to File Number SR-
BSE-2006-22 (the ``BeX Facility Filing''), a rule filing submitted in 
connection with the implementation of the first of two phases of BeX, a 
fully automated electronic book for the

[[Page 29021]]

display and execution of orders in securities. On August 25, 2006, File 
Number SR-BSE-2006-22 was approved by the Commission.\6\ On August 3, 
2006, the BSE filed, in connection with the implementation of the 
second phase of BeX and in connection with satisfying the requirements 
of Regulation NMS, File Number SR-BSE-2006-30. On September 29, 2006 
the Commission approved File Number SR-BSE-2006-30.\7\
---------------------------------------------------------------------------

    \6\ Securities Exchange Act Release No. 54365 (August 25, 2006) 
71 FR 52192 (September 1, 2006).
    \7\ Securities Exchange Act Release No. 54546 (September 29, 
2006) 71 FR 59161 (October 6, 2006).
---------------------------------------------------------------------------

    At the present time, all orders sent to BeX must be round-lot 
market or limit orders with the exception of orders for Nasdaq Global 
Market securities and Nasdaq Capital Market securities, which orders 
may be odd-lot or mixed-lot orders. The purpose of this proposed rule 
change is to amend BSE Rules to allow all orders sent to BeX to be odd-
lot or mixed-lot market or limit orders, thereby removing the 
limitation that all orders sent to BeX must be round lot orders unless 
such orders are for Nasdaq Global Market securities or Nasdaq Capital 
Market securities. In other words, the proposed rule change would allow 
all orders sent to BeX to be round-lot, odd-lot or mixed-lot market or 
limit orders. For stocks, 100 shares shall constitute a ``round lot,'' 
any amount less than 100 shares shall constitute an ``odd lot,'' and 
any amount greater than 100 shares that is not a multiple of a round 
lot shall constitute a ``mixed lot.''
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\8\ in general, and furthers 
the objectives of Section 6(b)(5) of the Act,\9\ in particular, in that 
it is designed to prevent fraudulent and manipulative acts and 
practices, to promote just and equitable principles of trade, and to 
protect investors and the public interest in that it is designed 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 for a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

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 does not: (1) 
Significantly affect the protection of investors or the public 
interest; (2) impose any significant burden on competition; and (3) 
become operative for thirty 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 Act \10\ and Rule 19b-
4(f)(6) \11\ thereunder.\12\
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
    \12\ Pursuant to Rule 19b-4(f)(6)(iii), the Exchange has given 
the Commission written 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 on which 
the Exchange filed the proposed rule change. See 17 CFR 240.19b-
4(f)(6)(iii).
---------------------------------------------------------------------------

    A proposed rule change filed under Commission Rule 19b-4(f)(6) \13\ 
normally does not become operative prior to thirty days after the date 
of filing. The BSE requests that the Commission waive the 30-day 
operative delay, as specified in Rule 19b-4(f)(6)(iii), and designate 
the proposed rule change to become operative immediately. The 
Commission believes that waiving the 30-day operative delay is 
consistent with the protection of investors and the public interest 
because such waiver will allow BSE to implement rules similar to those 
already in place at other exchanges and establish uniformity with 
respect to odd-lot and mixed-lot orders for all securities traded on 
BeX without needless delay. For these reasons, the Commission 
designates the proposed rule change as operative upon filing.\14\
---------------------------------------------------------------------------

    \13\ 17 CFR 240.19b-4(f)(6).
    \14\ For the purposes only of waiving the operative date of this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

    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 the furtherance of the purposes of the Act.

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 Number SR-BSE-2007-16 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-2007-16. 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-2007-16 and should be submitted on or before June 
13, 2007.

[[Page 29022]]

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
 [FR Doc. E7-9876 Filed 5-22-07; 8:45 am]

BILLING CODE 8010-01-P