Document ID: SEC-2006-0337-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.
Posted Date: 2006-03-14T05:00Z

[Federal Register: March 14, 2006 (Volume 71, Number 49)]
[Notices]               
[Page 13194-13196]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14mr06-122]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53436; File No. SR-BSE-2006-08]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto to Authorize Entry into Regulatory Services 
Agreements

March 7, 2006.
    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 February 15, 2006, the Boston Stock Exchange, Inc. (``Exchange'' or 
``BSE'') filed with the Securities and Exchange Commission 
(``Commission'') the proposed rule change as described in Items I and 
II below, which Items have been prepared by the Exchange. On March 2, 
2006, the Exchange filed Amendment No. 1 to the proposed rule

[[Page 13195]]

change.\3\ The Exchange filed the proposed rule change as a ``non-
controversial'' rule change under Rule 19b-4(f)(6) under the Act,\4\ 
which rendered the proposal effective upon filing with the Commission. 
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.
    \3\ In Amendment No. 1, the Exchange made non-substantive 
changes to the text of the proposed rule change.
    \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 proposes to amend its Constitution to permit the 
Exchange to contract with another self-regulatory organization 
(``SRO'') for the performance of certain of the Exchange's regulatory 
functions. The text of the proposed rule change is available on the 
BSE's Web site, http://www.bostonstock.com, at the BSE's Office of the 

Secretary, 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 Exchange 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 proposed rule change would create a mechanism that would allow 
the BSE to contract with another SRO for the performance of certain of 
the BSE's regulatory functions. The purpose of the proposed rule change 
is to enhance the BSE's ability to carry out its regulatory obligations 
under the Act by providing the BSE the ability to contract with another 
SRO for regulatory services. Under any agreement for regulatory 
services with another SRO, the BSE would remain an SRO registered under 
Section 6 of the Act \5\ and, therefore, would continue to have 
statutory authority and responsibility for enforcing compliance by its 
members, and persons associated with its members, with the Act, the 
rules thereunder, and the rules of the BSE.
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    \5\ 15 U.S.C. 78f.
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    This rule change would have immediate applicability with respect to 
a Regulatory Services Agreement (``RSA'') between the BSE, the Chicago 
Board Options Exchange, Incorporated (``CBOE''), and other options 
markets participating in the proposed Options Regulatory Surveillance 
Authority national market system plan. The BSE has determined that, to 
best discharge its SRO responsibilities, it will contract with CBOE, 
which is subject to Commission oversight pursuant to Sections 6 and 19 
of the Act,\6\ for CBOE to provide certain regulatory services to the 
BSE, as set forth in the RSA. In performing services under the RSA, 
CBOE will be operating pursuant to the statutory SRO responsibilities 
of the BSE under Sections 6 and 19, as well as performing for itself 
its own SRO responsibilities. The proposed rule change specifically 
states that any action taken by another SRO, or its employees or 
authorized agents, operating on behalf of the BSE pursuant to a 
regulatory services agreement with the BSE (e.g., CBOE under the RSA) 
will be deemed an action taken by the BSE. The BSE will retain ultimate 
responsibility for performance of its SRO duties under the RSA, and the 
proposed rule change states that the BSE will retain ultimate legal 
responsibility for, and control of, its SRO responsibilities.
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    \6\ 15 U.S.C. 78f and 15 U.S.C. 78s.
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \7\ in general, and furthers the 
objectives of Sections 6(b)(1), 6(b)(6) and 6(b)(7) of the Act \8\ in 
particular, in that it will enhance the ability of the Exchange to 
enforce compliance by its members and persons associated with its 
members with the provisions of the Act, the rules and regulations 
thereunder, and the rules of the Exchange; it will help ensure that 
members and persons associated with members are appropriately 
disciplined for violations of the Act, the rules and regulations 
thereunder, and the rules of the Exchange; and it will provide a fair 
procedure for the disciplining of members and persons associated with 
members.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 15 U.S.C. 78f(b)(1); 15 U.S.C. 78f(b)(6); and 15 U.S.C. 
78f(b)(7).
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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 written comments on 
the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the proposed rule change: (i) Does not significantly affect 
the protection of investors or the public interest; (ii) does not 
impose any significant burden on competition; and (iii) by its terms, 
does not become operative for 30 days after the date of 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) of the Act 
\9\ and subparagraph (f)(6) of Rule 19b-4 thereunder.\10\ The proposed 
rule change is based on a rule change previously filed by the American 
Stock Exchange LLC and approved by the Commission.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ See Securities Exchange Act Release No. 50122 (July 29, 
2004), 69 FR 47962 (August 6, 2004) (SR-Amex-2004-32).
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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 the 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, as amended, 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

[[Page 13196]]

Number SR-BSE-2006-08 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-2006-08. 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 Exchange. 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-2006-08 and should be submitted on or before April 
4, 2006.
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    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Nancy M. Morris,
Secretary.
[FR Doc. E6-3547 Filed 3-13-06; 8:45 am]

BILLING CODE 8010-01-P