Document ID: SEC-2008-0636-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Boston Stock Exchange, Inc.
Posted Date: 2008-05-02T04:00Z

[Federal Register: May 2, 2008 (Volume 73, Number 86)]
[Notices]               
[Page 24327-24329]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02my08-137]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-57713; File No. SR-BSE-2008-28]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Regarding Transfer of BOX Units From the Montreal Exchange Inc. to MX 
US 2, Inc.

April 25, 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 April 22, 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 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) of the Act \3\ and Rule 19b-
4(f)(6) 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)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange is submitting the proposed rule change to the 
Commission to amend the Fifth Amended and Restated Operating Agreement, 
dated January 26, 2005, (``BOX LLC Agreement''), of the Boston Options 
Exchange Group LLC (``BOX LLC''), in connection with the transfer by 
the Montreal Exchange Inc.,\5\ a company incorporated in Qu[eacute]bec, 
Canada (``MX''), of its 31.37% ownership interest in BOX LLC to MX U.S. 
2, Inc. (``MX US''), a wholly-owned U.S. subsidiary of MX.\6\ The text 
of the proposed rule change is available at the BSE, the Commission's 
Public Reference Room, and http://www.bostonstock.com.
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    \5\ The Montreal Exchange Inc. is also known in French as the 
Bourse de Montreal Inc.
    \6\ Capitalized terms not otherwise defined herein shall have 
the meanings set forth in the BOX LLC Agreement.

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[[Page 24328]]

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 proposal. The text of these 
statements may be examined at the places specified in Item IV below. 
The BSE 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
    On January 13, 2004, the Commission approved four BSE proposals 
that together established, through an operating agreement among its 
owners, a Delaware limited liability company, BOX LLC, to operate the 
BOX market as an options trading facility of the Exchange.\7\ MX has 
transferred its 31.37% ownership interest in BOX LLC to MX US. The 
Exchange is submitting the proposed rule change to the Commission to 
amend the BOX LLC Agreement pursuant to the proposed Instrument of 
Accession in connection with the transfer of MX's 31.37% ownership 
interest in BOX LLC to MX US.\8\ As a result, MX will agree to abide by 
all the provisions of the BOX LLC Agreement, including those provisions 
requiring submission to the jurisdiction of the Commission.\9\
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    \7\ See Securities Exchange Act Release Nos. 49066 (January 13, 
2004), 69 FR 2773 (January 20, 2004) (SR-BSE-2003-17) (establishing 
a fee schedule for the proposed BOX facility); 49065 (January 13, 
2004), 69 FR 2768 (January 20, 2004) (SR-BSE-2003-04) (creating 
Boston Options Exchange Regulation LLC to which the BSE would 
delegate its self-regulatory functions with respect to the BOX 
facility); 49068 (January 13, 2004), 69 FR 2775 (January 20, 2004) 
(SR-BSE-2002-15) (approving trading rules for the BOX facility); and 
49067 (January 13, 2004), 69 FR 2761 (January 20, 2004) (SR-BSE-
2003-19) (approving certain regulatory provisions of the BOX LLC 
Agreement).
    \8\ The Exchange represented that the Instrument of Accession 
was executed on April 22, 2008. See electronic mail from Lisa J. 
Fall, General Counsel, BOX LLC, to Molly Kim, Special Counsel, 
Division of Trading and Markets (``Division''), Commission, and 
Johnna Dumler, Special Counsel, Division, Commission, dated April 
22, 2008.
    \9\ The BOX LLC states, in part, that ``the Members, officers, 
directors, agents, and employees of Members irrevocably submit to 
the exclusive jurisdiction of the U.S. federal courts, U.S. 
Securities and Exchange Commission, and the Boston Stock Exchange, 
for the purposes of any suit, action or proceeding pursuant to U.S. 
federal securities laws, the rules or regulations thereunder, 
arising out of, or relating to, BOX activities or Article 19.6(a), 
(except that such jurisdictions shall also include Delaware for any 
such matter relating to the organization or internal affairs of BOX, 
provided that such matter is not related to trading on, or the 
regulation, of the BOX Market), and hereby waive, and agree not to 
assert by way of motion, as a defense or otherwise in any such suit, 
action or proceeding, any claims that they are not personally 
subject to the jurisdiction of the U.S. Securities and Exchange 
Commission, that the suit, action or proceeding is an inconvenient 
forum or that the venue of the suit, action or proceeding is 
improper, or that the subject matter hereof may not be enforced in 
or by such courts or agency.'' See BOX LLC Agreement, Section 19.6.
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    For the reasons stated above, the BSE is submitting to the 
Commission the proposed Instrument of Accession to the BOX LLC 
Agreement as a rule change.
2. Statutory Basis
    The Exchange believes that its proposal is consistent with the 
requirements of Section 6(b) of the Act,\10\ in general, and furthers 
the objectives of Section 6(b)(1),\11\ in particular, in that it 
enables the Exchange to be so organized so as to have the capacity to 
be able to carry out the purposes of the Act and to comply, and to 
enforce compliance by its exchange members and persons associated with 
its exchange members, with the provisions of the Act, the rules and 
regulations thereunder, and the rules of the Exchange.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(1).
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    The Exchange also believes that this filing furthers the objectives 
of Section 6(b)(5) of the Act \12\ in that it is designed to facilitate 
transactions in securities, to prevent fraudulent and manipulative acts 
and practices, to promote just and equitable principles of trade, 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 of a free and open market and a national market 
system, and, in general, to protect investors and the public interest.
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    \12\ 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 proposed rule change does not: (i) 
Significantly affect the protection of investors or the public 
interest; (ii) impose any significant burden on competition; and (iii) 
become operative for 30 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 \13\ and Rule 19b-
4(f)(6) thereunder.\14\
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 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.\15\ 
However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a 
shorter time if such action is consistent with the protection of 
investors and the public interest.\16\ The Exchange has requested that 
the Commission waive the 30-day operative delay. The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because the Instrument 
of Accession was executed on April 22, 2008, and there is no reason to 
delay implementation of the changes to the BOX LLC Agreement pursuant 
to the Instrument of Accession. For these reasons, the Commission 
designates the proposal to be operative upon filing with the 
Commission.\17\
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    \15\ 17 CFR 240.19b-4(f)(6)(iii). In addition, Rule 19b-
4(f)(6)(iii) requires the self-regulatory organization to give the 
Commission 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.
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ For purposes only of waiving the 30-day operative delay, 
the Commission has considered the proposed rule's impact on 
efficiency, competition, and capital formation. 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 purposes of the Act.\18\
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    \18\ See 15 U.S.C. 78s(b)(3)(C).
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IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing,

[[Page 24329]]

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-2008-28 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-BSE-2008-28. 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 the 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-2008-28 and should be 
submitted on or before May 23, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\19\
Florence E. Harmon,
Deputy Secretary.
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    \19\ 17 CFR 200.30-3(a)(12).
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 [FR Doc. E8-9695 Filed 5-1-08; 8:45 am]

BILLING CODE 8010-01-P