Document ID: SEC-2008-0780-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Boston Stock Exchange, Inc.
Posted Date: 2008-06-05T04:00Z

[Federal Register: June 5, 2008 (Volume 73, Number 109)]
[Notices]               
[Page 32064-32065]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr05jn08-95]                         

[[Page 32064]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57887; File No. SR-BSE-2008-31]

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

May 30, 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 May 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, II, 
and III below, which Items have been substantially prepared by the 
Exchange. The Exchange filed the proposed rule change pursuant to 
Section 19(b)(3)(A) 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).
    \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

    BSE proposes to amend the Fee Schedule of the Boston Options 
Exchange facility (``BOX'') to modify the fees and credits associated 
with the Liquidity Make or Take Pricing Structure. While changes to the 
Fee Schedule pursuant to this proposal are effective upon filing, the 
Exchange designated the changes operative for June 2, 2008. The text of 
the proposed rule change is available at BSE, the Commission's Public 
Reference Room, and http://www.bse.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 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 Section 7 of the BOX Fee Schedule 
\5\ to introduce Tier 1 and Tier 2 pricing for the Liquidity Make or 
Take Pricing Structure.\6\ The proposed rule change will reduce the 
fees and credits that the Exchange charges and applies to transactions 
in the iShares Russell 2000[reg] Index Fund (``IWM''), Powershares[reg] 
QQQ Trust Series 1 (``QQQQ''), and the Standard & Poor's Depositary 
Receipts[reg] (``SPY'') (collectively referred to as ``Tier 2 
Classes'') by fifteen cents ($0.15). Under the proposal, Tier 2 Class 
transactions subject to the Liquidity Make or Take Pricing Structure 
will have a thirty cent ($0.30) fee and fifteen cent ($0.15) credit for 
Market Makers and thirty cent ($0.30) fee and ten cent ($0.10) credit 
for a firm or Public Customer. This will maintain the current fee/
credit differential applied to each account type within the Liquidity 
Make or Take Pricing Structure, namely, fifteen cents ($0.15) for a 
Market Maker and twenty cents ($0.20) for a firm or Public Customer. 
Fees and credits for the proposed Tier 1 Classes will remain at the 
levels currently applied to transactions subject to the Liquidity Make 
or Take Pricing structure.\7\ Tier 1 pricing will continue to apply to 
all classes that currently participate in the Penny Pilot,\8\ other 
than the aforementioned Tier 2 Classes.
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    \5\ The BOX Fee Schedule can be found on the BOX Web site at 
http://www.bostonoptions.com.
    \6\ Capitalized terms not otherwise defined herein shall have 
the meanings set forth in the BOX Rules.
    \7\ Pursuant to the BOX Fee Schedule, Market Makers are 
currently subject to a forty-five cent ($0.45) charge and receive a 
thirty cent ($.0.30) credit. Firms and Public Customers are subject 
to a forty-five cent ($0.45) charge and a twenty-five cent ($0.25) 
credit.
    \8\ The rules pertaining to the Penny Pilot Program on BOX can 
be found in Section 33 of Chapter V of the BOX Rules. The Exchange 
has notified Participants of the classes included within the Penny 
Pilot Program via Regulatory Circular. See Boston Options Exchange 
Regulation LLC Regulatory Circular 2008-06.
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    Tier 2 Classes are among the most liquid and most actively traded 
options on BOX. Due to the vast liquidity in the Tier 2 Classes, BOX's 
cost to trade these classes is less than the costs of other classes 
traded on BOX. The Exchange believes that such lower costs should 
therefore result in decreased fees for trading in these Tier 2 Classes.
    Furthermore, BOX proposes to distribute a complete list of the 
classes included in Tier 1 and Tier 2 pricing to participants via 
Regulatory Circular. The Exchange believes that distributing a 
Regulatory Circular containing the Tier 1 and Tier 2 Classes is the 
best method of notifying and informing Participants of the relevant 
pricing structure.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\9\ in general, and Section 
6(b)(4) of the Act,\10\ in particular, in that it is designed to 
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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    \9\ 15 U.S.C. 78f(b).
    \10\ 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

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The foregoing proposed rule change is effective upon filing 
pursuant to Section 19(b)(3)(A)(ii)\11\ of the Act and Rule 19b-
4(f)(2)\12\ thereunder, because it establishes or changes a due, fee, 
or other charge applicable only to a member imposed by the Exchange. 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.
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    \11\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \12\ 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.

[[Page 32065]]

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-2008-31 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-2008-31. 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, 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-BSE-2008-31 and should be submitted on or before June 26, 
2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Acting Secretary.
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    \13\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E8-12481 Filed 6-4-08; 8:45 am]

BILLING CODE 8010-01-P