Document ID: SEC-2007-0384-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2007-03-14T04:00Z

[Federal Register: March 14, 2007 (Volume 72, Number 49)]
[Notices]               
[Page 11922-11924]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14mr07-108]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55419; File No. SR-BSE-2007-10]

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

March 7, 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 March 1, 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, II, 
and III below, which Items have been substantially prepared by the BSE. 
The BSE has designated this proposal as one establishing or changing a 
due, fee, or other charge imposed by the BSE under Section 
19(b)(3)(A)(ii) 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)(ii).
    \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

    The BSE proposes to amend the Minimum Activity Charge (``MAC'') 
contained in the Fee Schedule for the Boston Options Exchange 
(``BOX''). The Exchange proposes to add an alternative calculation of 
the minimum activity charge called ``MiniMAC.'' The text of the 
proposed rule change is available at the BSE, the Commission's Public 
Reference Room, and http://www.bostonstock.com/legal/filings/2007-10.pdf
.

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 BSE has prepared summaries, set forth in Sections A, 
B,

[[Page 11923]]

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 the MAC which is contained in the 
Fee Schedule for BOX. Currently, in order to determine if a Market 
Maker has reached its MAC, volume in their assigned (and unassigned) 
classes is charged a flat fee, which is then compared to the MAC. The 
Exchange now proposes to establish an alternative calculation of the 
minimum activity charge called ``MiniMAC.''
    The MiniMAC is the Minimum Activity Charge (``MAC'') discounted at 
fifty percent and is payable if a per contract traded fee of $0.40 (or 
$0.30 per contract traded in the case of classes traded that are 
included in the Penny Pilot Program), when multiplied by the Market 
Maker's actual trade executions for the month, does not result in a 
total trading fee payable to BOX at least equal to the monthly total of 
50% of the MAC (MiniMAC). If the MiniMAC is reached, the $0.40 per 
contract traded rate (or $0.30 per contract traded rate in the case of 
classes traded that are included in the Penny Pilot Program), will 
still be applied to the exceeding volume until MAC is reached. If the 
MAC is reached, the $0.20 per contract rate (or $0.15 per contract rate 
in the case of classes traded that are included in the Penny Pilot 
Program) will be applied to any exceeding volume.
    The following examples illustrate BOX billing calculations assuming 
one category A assigned class with a MAC of $10,000 and three different 
levels of volume executed:

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

----------------------------------------------------------------------------------------------------------------
                                              Example 1--Low Volume
----------------------------------------------------------------------------------------------------------------
MAC:                     $10,000  MiniMAC:                  $5,000   .....................
Volume:                    5,000  Volume:                    5,000
Volume at $0.20:          $1,000  Volume at $0.40:          $2,000   (5,000 contracts)
                       .........  Volume at $0.20:              $0   (0 contracts)
                                                        ------------
                       .........   Total                    $2,000
Subtotal A:              $10,000  Subtotal B:               $5,000   .....................  Final Charge: $5,000
----------------------------------------------------------------------------------------------------------------
                                              Example 2--Mid Volume
----------------------------------------------------------------------------------------------------------------
MAC:                     $10,000  MiniMAC:                  $5,000
Volume:                   20,000  Volume:                   20,000
Volume at $0.20:          $4,000  Volume at $0.40:          $8,000   (20,000 contracts)
                       .........  Volume at $0.20:              $0   (0 contracts)
                                                        ------------
                       .........   Total                    $8,000
Subtotal A:              $10,000  Subtotal B:               $8,000   .....................  Final Charge: $8,000
----------------------------------------------------------------------------------------------------------------
                                             Example 3--High Volume
----------------------------------------------------------------------------------------------------------------
MAC:                     $10,000  MiniMAC:                  $5,000
Volume:                   60,000  Volume:                   60,000
Volume at $0.20:         $12,000  Volume at $0.40:         $10,000   (25,000 contracts)
                       .........  Volume at $0.20:          $7,000   (35,000 contracts)
                                                        ------------
                       .........   Total                   $17,000
Subtotal A:              $12,000  Subtotal B:              $17,000   .....................  Final Charge:
                                                                                             $12,000
----------------------------------------------------------------------------------------------------------------

    BOX will apply whichever is lower, the MAC or the MiniMAC. The 
purpose of this proposed change is to provide for an alternative so 
that BOX is able to lower the fees for BOX Participants. The Exchange 
believes that the proposed change is necessary to equitably allocate 
the minimum activity charge fees to all of its Participants.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\5\ in general, and Section 
6(b)(4) of the Act,\6\ in particular, which requires that an exchange 
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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    \5\ 15 U.S.C. 78f(b).
    \6\ 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

    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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \7\ and Rule 19b-4(f)(2) \8\ thereunder because 
it changes a fee imposed by the Exchange. 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 furtherance of the purposes of 
the Act.
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    \7\ 15 U.S.C. 78s(b)(3)(A).
    \8\ 17 CFR 19b-4(f)(2).

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[[Page 11924]]

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-2007-10 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-2007-10. 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-2007-10 and should be submitted on or before April 
4, 2007.
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    \9\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-4588 Filed 3-13-07; 8:45 am]

BILLING CODE 8010-01-P