Document ID: SEC-2007-0239-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2007-02-15T05:00Z

[Federal Register: February 15, 2007 (Volume 72, Number 31)]
[Notices]               
[Page 7487-7488]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15fe07-117]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55260; File No. SR-BSE-2007-04]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend the Time Period for the Position Limits Pilot Program

February 8, 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 January 31, 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 and 
II below, which Items have been substantially prepared by BSE. The 
Exchange has filed the proposal as a ``non-controversial'' rule change 
pursuant to Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) 
thereunder,\4\ which renders it 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).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    BSE proposes to amend Chapter III, Section 7 (Position Limits) of 
the Rules of the Boston Options Exchange (``BOX''), an options trading 
facility of BSE, to extend its current pilot program to increase the 
standard position and exercise limits for equity option contracts and 
options on the Nasdaq-100 Index Tracking Stock (``QQQQ'') (``Pilot 
Program''). 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, 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 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 Pilot Program provides for an increase to the standard position 
and exercise limits for equity option contracts and for options on 
QQQQs for a six-month period.\5\ Specifically, the Pilot Program 
increased the applicable position and exercise limits for equity 
options and options on the QQQQ to the following levels:
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    \5\ The Pilot Program, which began on March 3, 2005, was 
extended on August 15, 2005, February 22, 2006, and August 30, 2006. 
See Securities Exchange Act Release Nos. 51317 (March 3, 2005), 70 
FR 12254 (March 11, 2005) (SR-BSE-2005-10) (``Pilot Program 
Notice''); 52264 (August 15, 2005), 70 FR 48992 (August 22, 2005) 
(SR-BSE-2005-37); 53347 (February 22, 2006), 71 FR 10573 (March 1, 
2006) (SR-BSE-2006-07); and 54388 (August 30, 2006), 71 FR 52833 
(September 7, 2006) (SR-BSE-2006-32).

------------------------------------------------------------------------
   Current equity option contract        Pilot program equity option
             limit \6\                          contract limit
------------------------------------------------------------------------
13,500 contracts.                    25,000 contracts.
22,500 contracts.                    50,000 contracts.
31,500 contracts.                    75,000 contracts.
60,000 contracts.                    200,000 contracts.
75,000 contracts.                    250,000 contracts.
------------------------------------------------------------------------
Current QQQQ option contract limit   Pilot program QQQQ option contract
                                      limit
------------------------------------------------------------------------
300,000 contracts.                   900,000 contracts.
------------------------------------------------------------------------
\6\ Except when the Pilot Program is in effect.

    The Exchange believes that extending the Pilot Program for six 
months is warranted due to positive feedback from members and for the 
reasons cited in the original rule filing that proposed the adoption of 
the Pilot Program.\7\ In addition, BOX has not encountered any problems 
or difficulties relating to the Pilot Program since its inception. For 
these reasons, the BSE requests that the Commission extend the Pilot 
Program for an additional six months, through and including September 
1, 2007.
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    \7\ See Pilot Program Notice, supra note 5.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with Section 
6(b) of the Act,\8\ in general, and furthers the objective of Section 
6(b)(5) of the Act,\9\ in particular, in that it is designed to promote 
just and equitable principles of trade and to protect investors and the 
public interest.
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    \8\ 15 U.S.C. 78f(b).
    \9\ 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 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 30 
days from the date of this filing, or such shorter time as the 
Commission may designate, it has become effective pursuant to Section 
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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    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.\12\ 
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange has requested that the 
Commission waive the 30-day operative delay. The Commission believes 
that waiving the 30-day operative delay is

[[Page 7488]]

consistent with the protection of investors and in the public interest 
because it will allow the Pilot Program to continue uninterrupted.\14\
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    \12\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires that a self-regulatory organization submit to 
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 of filing 
of the proposed rule change, or such shorter time as designated by 
the Commission. BSE has satisfied the five-day pre-filing 
requirement.
    \13\ Id.
    \14\ For purposes only of waiving the operative delay, 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 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 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 No. SR-BSE-2007-04 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-2007-04. 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 will also be available for inspection and copying at the 
principal office of 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 No. SR-
BSE-2007-04 and should be submitted on or before March 8, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E7-2608 Filed 2-14-07; 8:45 am]

BILLING CODE 8011-01-P