[Federal Register Volume 62, Number 132 (Thursday, July 10, 1997)]
[Notices]
[Pages 37104-37105]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-18092]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-38811; File No. SR-BSE-97-3]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Boston Stock Exchange, 
Incorporated Relating to the Authority and Responsibility of Floor 
Officials

July 2, 1997.
    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 June 18, 1997, the Boston Stock Exchange, Incorporated (``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 prepared by the Exchange. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. Sec. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange seeks to supplement its rule regarding the authority 
and responsibilities of Floor Officials, and the appeal of Floor 
Official rulings. The text of the proposed rule change is available at 
the Office of the Secretary, the Exchange, and at the Commission.

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. 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

    The purpose of the proposed rule change is to more clearly define 
the authority and responsibilities of Floor Officials set forth in the 
Supplementary Material to Chapter I, Section 1 of the Rules of the 
Board of Governors, as well as to provide a mechanism for members

[[Page 37105]]

to appeal a ruling with which they may not agree. The current 
provisions are limited to defining who shall serve as Floor Officials 
and general jurisdiction of Floor Official authority. The Exchange 
seeks to explain in more detail the day-to-day functioning of the Floor 
Official in deciding issues that arise in regard to transactions on the 
floor or through Intermarket Trading System (``ITS'').\3\ First, the 
Exchange proposes to add Supplementary Material .30, which states that 
the Board of Governors delegates authority to Floor Officials. Proposed 
Supplementary Material .30 also indicates that Floor Officials have 
numerous responsibilities regarding various rules, policies, and 
interpretations governing trading on the Exchange. In addition, the 
Exchange proposes to add Supplementary Material .40, which addresses 
the exclusion of Floor Officials from the ruling process due to 
conflicts of interest. Proposed Supplementary Material .50 and .60 
refer to Floor Officials' responsibilities to keep apprised of new 
rules and policy determinations and to consult with other Floor 
Officials in making fair and consistent rulings. The Exchange also 
proposes to add Supplementary Material .70, which provides members with 
the ability to appeal an unfavorable decision by a Floor Official with 
which the member disagrees, or to bring changes in circumstances to the 
attention of the Floor Official involved in the ruling. Finally, 
Proposed Supplementary Material .80 deems the failure to comply with a 
Floor Official ruling to be a violation of the Rules of the Board of 
Governors. Although these provisions apply today in practice, the 
Exchange believes that their codification as part of the Exchange rules 
will clearly delineate member rights and obligations. The Exchange has 
further represented that the Rules are similar to practices established 
by the New York Stock Exchange concerning the authority and 
responsibilities of its floor officials.\4\
---------------------------------------------------------------------------

    \3\ The ITS, a communications and order routing network linking 
eight national securities exchanges and the electronic over-the-
counter (``OTC'') market operated by the NASD, is a National Market 
System plan approved by the Commission pursuant to Section 11A of 
the Act and Rule 11Aa3-2 thereunder.
    \4\ NYSE Floor Official Manual, pp. 1-3 (June 1996).
---------------------------------------------------------------------------

    The basis for the proposed rule change is Section 6(b)(5) of the 
Act,\5\ in that the proposed rule change is designed to promote just 
and equitable principles of trade; to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities, 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; and is not designed to 
permit unfair discrimination between customers, issuers, brokers, or 
dealers.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. Sec. 78f(b)(5).
---------------------------------------------------------------------------

(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.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to 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) does not become operative for 30 days from June 18, 1997, the 
rule change proposal has become effective pursuant to Section 
19(b)(3)(A) of the Act \6\ and Rule 19b-4(e)(6) \7\ thereunder. In 
particular, the Commission believes the proposal qualifies as a 
``noncontroversial filing'' in that the proposed standards do not 
significantly affect the protection of investors or the public interest 
and do not impose any significant burden on competition. 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.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. Sec. 78s(b)(3)(a).
    \7\ 17 CFR 240.19-4(e)(6).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. 
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. Sec. 552, will be available for inspection and copying at 
the Commission's Public Reference Section, 450 Fifth Street, N.W., 
Washington, D.C. 20549. Copies of such filing will also be available 
for inspection and copying at the principal office of the BSE. All 
submissions should refer to SR-BSE-97-03 and should be submitted by 
July 31, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-18092 Filed 7-9-97; 8:45 am]
BILLING CODE 8010-01-M