Document ID: SEC-2007-0342-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2007-03-07T05:00Z

[Federal Register: March 7, 2007 (Volume 72, Number 44)]
[Notices]               
[Page 10276-10277]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07mr07-173]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55373; File No. SR-BSE-2006-11]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing of Proposed Rule Change and Amendments No. 1 and 2 
Relating to the Boston Options Exchange's Minor Rule Violation Plan

February 28, 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 March 6, 2006, the Boston Stock Exchange (``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 Amendments Nos. 1 and 2 to the proposed rule change on June 28, 
2006, and July 14, 2006, respectively. The Commission is publishing 
this notice to solicit comments on the proposed rule change, as 
amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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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 and make additions to sections of 
the Boston Options Exchange (``BOX'') Rules related to its Minor Rule 
Violation Plan (``MRVP''). The text of the proposed rule change is 
available on BSE's Web site at http://www.bostonstock.com/legal, at 

BSE's principal office, and at the Commission's Public Reference Room.

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 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 Chapter X of its rules relating to 
the BOX MRVP to include five additional violations of BOX's rules 
governing Market Makers doing business on BOX and the Intermarket 
Linkage Rules. The rule proposal imposes sanctions for each violation, 
which become more significant with each additional violation occurring 
within a 24-month period.
    These provisions impose sanctions in BOX Rule Chapter X, Section 
2(e) for contrary exercise advice infractions of Chapter VII, Section 
1(c), (d), (f), and (g); in Section 2(f) for locked and crossed market 
infringements of Chapter XII, Section 4; in Section 2(g) for Market 
Maker assigned activity violations of Chapter VI, Section 4(e); in 
Section 2(h) for a Market Maker's failure to respond to a request for a 
quote within the

[[Page 10277]]

designated time limit of Chapter VI, Section 6(b)(ii)-(iii); and in 
Section 2(i) for Inter-Market Linkage trade-through violations of 
Chapter XII, Section 3(a). The sanctions imposed would include the 
application of a fine for each violation and an increased fine amount 
for repeat violations. In the instance of a trade-through violation, 
the rule proposal would also allow BOX Regulation to require the 
Options Participant \3\ to disgorge any gains from transactions in 
violation of the trade-through rules.
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    \3\ See BOX Rule Chapter I, Section 1(a)(40) for definition of 
``Options Participants.''
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    The Exchange believes that the proposed rule changes would 
strengthen its ability to carry out its oversight responsibilities as a 
self-regulatory organization and reinforce its surveillance and 
enforcement functions.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\4\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\5\ in particular, in that it 
would promote just and equitable principles of trade, facilitate 
transactions in securities, remove impediments to and perfect the 
mechanisms of a free and open market and a national market system, and 
protect investors and the public interest.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 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 would 
impose any burden on competition 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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    (A) By order approve such proposed rule change, or
    (B) institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 e-mail to rule-comments@sec.gov. Please include File 

Number SR-BSE-2006-11 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 10 F Street, NE., 
Washington, DC 20549-1090.

    All submissions should refer to File Number SR-BSE-2006-11. 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-2006-11 and 
should be submitted on or before March 28, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\6\
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    \6\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-4041 Filed 3-6-07; 8:45 am]

BILLING CODE 8010-01-P