Document ID: SEC-2008-1457-0001
Agency: sec
Document Type: Notice
Title: Self-Regulatory Organizations; Proposed Rule Changes: Boston Stock Exchange, Inc.
Posted Date: 2008-10-23T04:00Z

[Federal Register: October 23, 2008 (Volume 73, Number 206)]
[Notices]               
[Page 63221-63222]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23oc08-112]                         

[[Page 63221]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-58805; File No. SR-BSE-2008-44]

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

October 17, 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 October 10, 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 prepared by the BSE. The Exchange has 
designated the proposed rule change as a ``non-controversial'' 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 Boston Stock Exchange (the ``Exchange'') proposes to update the 
Boston Options Exchange Group LLC (``BOX'') rules to increase and 
strengthen sanctions imposed pursuant to the Minor Rule Violation Plan 
in connection with any Options Participant or non-Options Participant 
customer in accordance with BOX Rules Chapter III, Section 7. The text 
of the proposed rule change is available on the Exchange's Web site at 
http://nasdaq trader.com/Trader.aspx?id=Boston--Stock--Exchange, at the 
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 purpose of the proposed rule change is to update the BOX rules 
to clarify and strengthen sanctions imposed for violations of BOX Rules 
Chapter III, Section 7 pursuant to the Minor Rule Violation Plan, as 
found in BOX Rules, Chapter X. The amendment will impose a flat fine 
amount for a violation, rather than a fine levied per contract. In 
addition, the proposed amendment will eliminate the current distinction 
between Customer accounts and Options Participant accounts. The 
Exchange believes these changes will serve as an effective deterrent to 
violative conduct.
    The Exchange and certain other self-regulatory organizations 
(``SRO's''), as members of the Intermarket Surveillance Group (the 
``ISG''), executed and filed with the Securities and Exchange 
Commission on October 29, 2007, a final version of the Agreement 
pursuant to Section 17(d) of the Securities Exchange Act of 1934 (as 
amended) (the ``Agreement'').\5\ The members of the ISG intend to enter 
into an amendment to the 17d-2 Agreement in the near future concerning 
the surveillance and sanction of Position Limit violations. In 
anticipation, the SRO's have agreed that their respective rules 
concerning position limits concerning options contracts are common 
rules and should be consistent with one another. The Exchange's 
proposed amendment to its Minor Rule violation Plan will result in 
further consistency of sanctions among the signatories to the 17d-2 
Agreement and the forthcoming amendment concerning Position Limit 
violations.
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    \5\ See Securities Exchange Act Release No. 56941 (April 11, 
2008), 73 FR 75 (April 17, 2008).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act,\6\ in general, and furthers the 
objectives of Section 6(b)(5) of the Act,\7\ in particular, to promote 
just and equitable principles of trade, 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. 
Specifically, the Exchange believes that the proposed rule change will 
promote consistency in minor rule violations and respective SRO 
reporting obligations set forth pursuant to Rule 19d-1(c)(2) under the 
Act \8\, which governs minor rule plans.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
    \8\ 17 CFR 240.19d-1(c)(2).
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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 
result in 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 proposed rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \9\ and Rule 19b-4(f)(6) thereunder \10\ 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 filing, or such shorter 
time as the Commission may designate if consistent with the protection 
of investors and the public interest.\11\
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    \9\ 15 U.S.C. 78s(b)(3)(A).
    \10\ 17 CFR 240.19b-4(f)(6).
    \11\ 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 this requirement.
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    The Exchange has asked the Commission to waive the 30-day operative 
delay and designate the proposed rule change as operative upon filing. 
The Commission hereby grants the Exchange's request and believes that 
doing so is consistent with the protection of investors and the public 
interest.\12\ The Exchange's proposed

[[Page 63222]]

rule change is based on a similar proposal that was previously approved 
by the Commission\13\ and does not raise any novel or significant 
issues. Therefore, the Commission designates the proposed rule change 
operative upon filing.
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    \12\ 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).
    \13\ See Securities Exchange Act Release No. 58119 (July 8, 
2008), 73 FR 40646 (July 15, 2008) (SR-CBOE-2008-53). See also 
Securities Exchange Act Release No. 58289 (August 1, 2008), 73 FR 
46667 (August 11, 2008) (SR-ISE-2008-62).
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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.

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 Number SR-BSE-2008-44 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, Station Place, 100 F Street, NE., Washington, 
DC 20549-1090.

All submissions should refer to File Number SR-BSE-2008-44. 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 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 publicly available. All 
submissions should refer to File Number SR-BSE-2008-44 and should be 
submitted on or before November 13, 2008.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\14\
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    \14\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8-25239 Filed 10-22-08; 8:45 am]

BILLING CODE 8011-01-P