Document ID: SEC-2007-0114-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2007-01-25T05:00Z

[Federal Register: January 25, 2007 (Volume 72, Number 16)]
[Notices]               
[Page 3448-3450]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25ja07-84]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55139; File No. SR-BSE-2007-01]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend the Effective Date of a Previous Rule Change Relating to 
Information Contained in a Directed Order on the Boston Options 
Exchange

January 19, 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 16, 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 and 
II below, which Items have been substantially prepared by the BSE. The 
BSE filed the 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 
proposed rule change 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 BSE proposes to extend the effective date of the amended rule 
governing the Exchange's Directed Order process on the Boston Options 
Exchange (``BOX'') from January 31, 2007 to July 31, 2007.

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
    On March 20, 2006 the BSE proposed an amendment to its rules 
governing its Directed Order process on the BOX.\5\ The rules were 
amended to clearly state that the BOX Trading Host identifies to an 
Executing Participant (``EP'') the identity of the firm entering a 
Directed Order. The amended rule was to be effective until June 30, 
2006, while the Commission considered a corresponding Exchange proposal 
\6\ to amend its rules to permit EPs to choose the firms from which 
they will accept Directed Orders, while providing complete anonymity of 
the firm entering a Directed Order.
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    \5\ See Securities Exchange Act Release No. 53516 (March 20, 
2006), 71 FR 15232 (March 27, 2006) (SR-BSE-2006-14).
    \6\ See Securities Exchange Act Release No. 53357 (February 23, 
2006), 71 FR 10730 (March 2, 2006) (SR-BSE-2005-52).
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    On June 30, 2006, the Exchange proposed extending the effective 
date of the amended rule governing its Directed Order process on the 
BOX from June 30,

[[Page 3449]]

2006 to September 30, 2006 \7\ while the Commission continued to 
consider the corresponding Exchange proposal to amend its rules to 
permit EPs to choose the firms from which they would accept Directed 
Orders, while providing complete anonymity of the firm entering a 
Directed Order and, on September 11, 2006, the Exchange again proposed 
extending the effective date of the amended rule governing its Directed 
Order process on the BOX from September 30, 2006 to January 31, 
2007.\8\
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    \7\ See Securities Exchange Act Release No. 54082 (June 30, 
2006), 71 FR 38913 (July 10, 2006) (SR-BSE-2006-29).
    \8\ See Securities Exchange Act Release 54469 (September 19, 
2006), 71 FR 56201 (September 26, 2006) (SR-BSE-2006-38).
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    The Exchange now proposes another extension of the effective date 
of the amended rule governing its Directed Order process on the BOX 
from January 31, 2007, to July 31, 2007. In the event the Commission 
reaches a decision with respect to the corresponding Exchange proposal 
to amend its rules before July 31, 2007, the amended rule governing the 
Exchange's Directed Order process on the BOX will cease to be effective 
at the time of that decision.
    This filing proposes to extend the effective date of the amended 
rule governing the Exchange's Directed Order process on the BOX from 
January 31, 2007 to July 31, 2007.\9\
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    \9\ In the event that the issue of anonymity in the Directed 
Order process is not resolved by July 31, 2007, the Exchange intends 
to submit another filing under Rule 19b-4(f)(6) under the Act 
extending this rule and system process.
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2. Statutory Basis
    The amended rule is designed to clarify the information contained 
in a Directed Order. This proposed rule filing seeks to extend the 
amended rule's effectiveness from January 31, 2007 to July 31, 2007. 
This extension will afford the Commission the necessary time to 
consider SR-BSE-2005-52 which would amend the BOX rules on a permanent 
basis to permit EPs to choose the firms from which they will accept 
Directed Orders while providing complete anonymity of the firm entering 
a Directed Order. Accordingly, the Exchange believes that the proposal 
is consistent with the requirements of Section 6(b) of the Act,\10\ in 
general, and Section 6(b)(5) of the Act,\11\ in particular, in that it 
is designed to foster cooperation and coordination with persons engaged 
in regulating, clearing, settling, processing information with respect 
to, and facilitating transaction in securities, to remove impediments 
to and perfect the mechanism for a free and open market and a national 
market system, and, in general, to protect investors and the public 
interest.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 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: (1) Does not 
significantly affect the protection of investors or the public 
interest; (2) does not impose any significant burden on competition; 
and (3) by its terms does not become operative for 30 days after the 
date of this filing, or such shorter time as the Commission may 
designate if consistent with the protection of investors and the public 
interest, the proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) \12\ of the Act and Rule 19b-4(f)(6) 
thereunder.\13\
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    \12\ 15 U.S.C. 78s(b)(3)(A).
    \13\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \14\ normally 
may not become operative prior to 30 days after the date of filing. 
However, Rule 19b-4(f)(6)(iii) \15\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The BSE requests that the Commission 
waive the 5-day pre-filing notice requirement and the 30-day operative 
delay, as specified in Rule 19b-4(f)(6)(iii),\16\ which would make the 
rule change effective and operative upon filing. The Commission 
believes that waiving the 5-day pre-filing notice and the 30-day 
operative delay is consistent with the protection of investors and the 
public interest because such waiver would continue to conform the BOX 
rules with BOX's current practice and clarify that Directed Orders on 
BOX are not anonymous.\17\ Accordingly, the Commission designates that 
the proposed rule change effective and operative upon filing with the 
Commission.
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    \14\ 17 CFR 240.19b-4(f)(6).
    \15\ 17 CFR 240.19b-4(f)(6)(iii).
    \16\ 17 CFR 240.19b-4(f)(6)(iii).
    \17\ For purposes only of waiving the operative delay for this 
proposal, the Commission has considered the proposed rule's impact 
on efficiency, competition, and capital formation. See 15 U.S.C. 
78c(f).
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    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.

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-2007-01 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-2007-01. 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

[[Page 3450]]

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-2007-01 and should be 
submitted on or before February 15, 2007.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-1103 Filed 1-24-07; 8:45 am]

BILLING CODE 8011-01-P