[Federal Register Volume 64, Number 4 (Thursday, January 7, 1999)]
[Notices]
[Pages 1040-1041]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-303]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-40856; File No. SR-BSE-98-12]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change, as Amended, by 
the Boston Stock Exchange, Inc. Relating to its Minor Rule Violation 
Plan.

December 29, 1998.
    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 December 9, 1998, 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 Exchange. On December 
23, 1998, the Exchange submitted Amendment No. 1 to the proposed rule 
change.\3\ The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons. For the reasons 
discussed below, the Commission is granting accelerated approval of the 
proposed rule change, as amended.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Letter from Karen A. Aluise, Vice President, BSE, to Ann 
Vlcek, Division of Market Regulation, Commission, dated December 23, 
1998 (``Amendment No. 1''). In Amendment No. 1, the BSE clarified 
language regarding the Summary Fines for violation of the Post 
Rules.
---------------------------------------------------------------------------

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

    The Exchange seeks to adopt written policies and procedures to 
address certain administrative issues related to the new trading floor 
(``Floor'') \4\ in an effort to control access to secure areas and to 
give jurisdiction over posts to the Floor Facilities Committee 
(``Committee''). The text of the Exchange's proposal is available at 
the Exchange and at the Commission.
---------------------------------------------------------------------------

    \4\ The BSE is scheduled to move into its new trading floor on 
January 4, 1999.
---------------------------------------------------------------------------

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 III 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 add two trading floor 
rules in regard to post assignment and telecommunications room (``Comm 
Room'') access to the Exchange's Minor Rule Violation Plan's Summary 
Fine Schedule. This will enable the Exchange to address violations of 
these two rules, which are deemed minor in nature due to their 
administrative function, through the use of fines rather than a full 
disciplinary procedure.
    The proposed Summary Fines regarding Post Rules provide that any 
post relocation or alteration of any post without the prior written 
consent of the Committee; refusal of a post location change by the 
Committee; use of an unassigned post for any purpose without the prior 
written consent of the Exchange; storage of materials in an 
unauthorized area of the Floor; and/or placing or installing any 
personal equipment (computers, file cabinets, chairs, bulletin boards, 
tables, shelves,

[[Page 1041]]

desks, etc.) without the prior written authorization of the Exchange 
could result in a $250 fine for the initial offense and a $500 fine for 
subsequent offenses by the Exchange for any damage to a post and/or the 
removal of materials and/or equipment.
    The proposed Summary Fines regarding Comm Room Rules provides that 
not obtaining a permit number from the Exchange prior to any 
installation or servicing of hardware or telecommunications equipment 
(i.e., voice and data); unauthorized vendor access to the Comm Room or 
the Trading Floor without prior notification to the Exchange and 
accompaniment by an authorized Exchange staff member or floor member; 
and/or unauthorized equipment removal from any Exchange location could 
result in a $250 fine for the initial offense and a $500 fine for 
subsequent offenses. It further provides that these fines are in 
addition to any costs incurred by the Exchange for any loss of, damage 
to and/or removal of equipment.
    The statutory basis for the proposed rule change is Section 6(b)(5) 
of the Act,\5\ in that it is designed to foster cooperation and 
coordination with persons engaged in regulating, clearing, settling, 
processing information with respect to, and facilitating transactions 
in securities; and is not designed to permit unfair discrimination 
between customers, issuers, brokers, or dealers.
---------------------------------------------------------------------------

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

B. Self-Regulatory Organization's Statement on Burden on Competition

    The BSE does not believe that the proposed rule change will impose 
any burden on competition that is not necessary or appropriate in 
furtherance of the Act.

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

    No written comments were either solicited or received.

III. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposal is 
consistent with the Act. Persons making written submissions should file 
six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW, Washington, DC 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. 
552, will be available for inspection and copying in the Commission's 
Public Reference Room. Copies of such filing will also be available for 
inspection and copying at the principal office of the BSE. All 
submissions should refer to File No. SR-BSE-98-12 and should be 
submitted by January 28, 1999.

IV. Commission's Findings and Order Granting Accelerated Approval 
of the Proposed Rule Change

    The Commission finds that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange and, in 
particular, the requirements of Section 6 of the Act.\6\ Section 
6(b)(5) \7\ of the Act states that the rules of an exchange must be 
designed to foster cooperation and coordination with persons engaged in 
regulating, clearing, settling, processing information with respect to, 
and facilitating securities transactions. These rules also must help to 
remove impediments to and perfect the mechanism of a free and open 
market. The Commission believes the proposed Summary Fines regarding 
the Post Rules and Comm Rules are consistent with this provision of the 
Act in that they will enable the Exchange to appropriately address 
violations of these rules.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

    The Exchange's proposal is also consistent with the requirements in 
Sections 6(b)(1) \8\ and 6(b)(6) \9\ of the Act that the rules of an 
exchange enforce compliance with and provide appropriate discipline for 
violations of the Exchange's rules and the rules under the Act. 
Moreover, because BSE Chapter XVIII Section 4 provides procedural 
rights to the person fined, the proposal provides a fair procedure for 
the disciplining of members and persons associated with members, 
consistent with 6(b)(7) \10\ and 6(d)(1) \11\ of the Act.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78f(b)(1).
    \9\ 15 U.S.C. 78f(b)(6).
    \10\ 15 U.S.C. 78f(b)(7).
    \11\ 15 U.S.C. 78f(d)(1).
---------------------------------------------------------------------------

    Pursuant to Section 19(b)(2),\12\ the Commission finds good cause 
for approving the proposed rule change, as amended, prior to the 30th 
day after the date of publication of notice thereof in the Federal 
Register.\13\ The Commission notes that the Exchange moves to its new 
trading floor on January 4, 1999, and believes that accelerated 
approval of the proposed rule change will enable the Exchange to better 
enforce compliance with its Post Rules and Comm Rules without any 
unnecessary delay. In addition, the Commission notes that the proposed 
rule change is generally administrative in nature and, as such, does 
not raise any competitive or investor protection issues.
---------------------------------------------------------------------------

    \12\ 15 U.S.C. 78s(b)(2).
    \13\ In reviewing this proposal, the Commission has considered 
its impact on efficiency, competition, and capital formation. 15 
U.S.C. 78c(f).
---------------------------------------------------------------------------

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\14\ that the proposed rule change, as amended, (SR-BSE-98-12) is 
hereby approved on an accelerated basis.

    \14\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
---------------------------------------------------------------------------

    \15\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-303 Filed 1-6-99; 8:45 am]
BILLING CODE 8010-01-M