Document ID: SEC-2007-0182-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2007-02-07T05:00Z

[Federal Register: February 7, 2007 (Volume 72, Number 25)]
[Notices]               
[Page 5772-5774]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07fe07-156]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55197; File No. SR-BSE-2007-02]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Amend the Boston Options Exchange Fee Schedule

January 30, 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 January 22, 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 Exchange proposes the following changes to the Fee Schedule for 
the Boston Options Exchange (``BOX''). The first proposed change to the 
Fee Schedule relates to the Penny Pilot Program.\5\ This proposed 
change will allow BOX to introduce lower fees for those instruments 
that are included in the Penny Pilot Program, which trade in increments 
of one cent. The second proposed change is to amend the Fee Schedule to 
permanently eliminate a fee that is currently waived. Finally, the

[[Page 5773]]

Exchange proposes to amend the Minimum Activity Charge (``MAC'') 
contained in the BOX Fee Schedule. The proposed change is to account 
for the effect that current market conditions have had on the MAC. 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/07-02.pdf
.

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    \5\ See Securities Exchange Release No. 54789 (November 20, 
2006), 71 FR 68654 (November 27, 2006) (SR-BSE-2006-49).
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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, 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 the following changes to the BOX Fee 
Schedule. The first proposed change to the Fee Schedule relates to the 
Penny Pilot Program. This proposed change will allow BOX to introduce 
lower fees for those instruments that are included in the Penny Pilot 
Program, which trade in increments of one cent. The second proposed 
change is to amend the Fee Schedule to permanently eliminate a fee that 
is currently waived. Finally, the Exchange proposes to amend the MAC 
contained in the BOX Fee Schedule. The proposed change is to account 
for the effect that current market conditions have had on the MAC. The 
three proposed changes to the Fee Schedule are discussed in further 
detail below.
(a) Reduction in Fees Related to the Penny Pilot Program
    The Exchange is proposing to lower fees for those instruments that 
are included in the Penny Pilot Program, which trade in increments of 
one cent. This proposed change will reduce the trading fees for those 
instruments from the standard trading fee of $0.20 per contract traded 
to a fee of $0.15 per contract traded. BOX believes that this reduction 
in fees will encourage trading for those classes traded in the Penny 
Pilot Program.
(b) Removal of Fee Which is No Longer Charged
    BOX does not currently charge the $0.40 per contract fee for 
contracts for Broker Dealer Proprietary Accounts and Market Makers 
traded against an order the Trading Host filters to prevent trading 
through the NBBO. BOX proposes to delete the charge from the BOX Fee 
Schedule to conform the Fee Schedule to reflect BOX's current practice. 
The proposed change will accurately reflect the charges that BOX levies 
on its Participants.\6\
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    \6\ The Exchange clarified that the $0.40 per contract fee is 
being deleted from the Fee Schedule because BOX has been waiving the 
fee for Broker Dealer Proprietary Accounts and Market Makers. 
Telephone conference between Lisa Fall, General Counsel, BOX; Brian 
Donnelly, Assistant Vice President, Regulation and Compliance, BSE; 
David Liu, Senior Special Counsel, Commission; and Jan Woo, 
Attorney, Commission, on January 26, 2007.
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(c) Changes to the MAC
    Recent increases in options trading have resulted in many BOX 
listed classes to be reclassified into higher MAC categories. BOX is 
seeking to amend its existing MAC program to provide uniform fee relief 
to its Participants. The proposed change alters the month in which the 
MAC reclassifications are calculated from January to July. The changes 
to the MAC program are being proposed to prevent unnecessary fee 
increases for BOX Participants.\7\ Moving the month of reclassification 
to July will afford BOX the opportunity to keep the current MAC 
classifications the same for an additional six months, thus keeping 
fees to Participants the same.\8\ No changes are being sought to alter 
the fundamental structure of the existing program.
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    \7\ The Exchange clarified that moving the reclassification to 
July may provide relief to BOX Participants for six months. Id.
    \8\ Id.
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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, 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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    \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

    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 \11\ and Rule 19b-4(f)(2) \12\ 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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    \11\ 15 U.S.C. 78s(b)(3)(A).
    \12\ 17 CFR 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. 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-2007-02 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-2007-02. 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

[[Page 5774]]

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-2007-02 and should be 
submitted on or before February 28, 2007.
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    \13\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-1944 Filed 2-6-07; 8:45 am]

BILLING CODE 8010-01-P