[Federal Register Volume 64, Number 97 (Thursday, May 20, 1999)]
[Notices]
[Pages 27609-27610]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12665]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41396; File No. SR-BSE-99-04]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by the Boston Stock Exchange, Inc. Relating to Its Minor Rule 
Violation Plan

May 13, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[[Page 27610]]

(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 26, 1999, 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, 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. 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 amend the Summary Fine Schedule of the Minor 
Rule Violation Plan through the addition of violations of Rule 11Ac1-4 
under the Act (``Display Rule'').\3\ The text of the proposed rule 
change is available at the Office of the Secretary, BSE, and at the 
Commission.
---------------------------------------------------------------------------

    \3\ 17 CFR 240.11Ac1-4.
---------------------------------------------------------------------------

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 Exchange proposes to amend its Minor Rule Violation Plan 
(``Plan'') to include violations of the Display Rule.\4\ By amending 
the Summary Fine Schedule of the Plan, the Exchange will address 
certain violations of the Display Rule, which are deemed to be 
inadvertent, or without special aggravating or intentional purposes, 
through the use of fines rather than a full disciplinary procedure. 
Where violations of the Display Rule are intentional, however, the 
Exchange is not limited nor precluded from initiating more formal 
Disciplinary Proceedings under Chapter XXX or imposing sanctions of 
more or less than the recommended fines (not to exceed $2,500 in any 
event).
---------------------------------------------------------------------------

    \4\ 17 CFR 240.11Ac1-4.
---------------------------------------------------------------------------

    The Plan as amended would provide that failure to display a 
customer limit order immediately (no later than 30 seconds) after 
receipt (without a specific exclusion provided by the Display Rule) 
will result in a written warning for the initial offense; a $50 fine 
for the second offense; and a $100 fine for subsequent offenses.
2. Statutory Basis
    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. Additionally, the BSE 
believes the proposal is consistent with Section 11A(a)1(C)(iii) and 
(iv) of the Act.\6\ In adopting Section 11A, Congress found that it is 
in the public interest and appropriate for the protection of investors 
and the maintenance of fair and orderly markets to assure the 
availability to brokers, dealers, and investors of information with 
respect to quotations for and transactions in securities, and to assure 
the practicability of brokers executing investors' orders in the best 
market.\7\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b)(5).
    \6\ 15 U.S.C. 78k-1(a)(1(C)(iii) and (iv).
    \7\ Id.
---------------------------------------------------------------------------

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

    No written comments were either solicited or received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. by order approve such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be disapproved.

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. Persons making written submissions 
should file six copies thereof with the Secretary, Securities and 
Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 
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 
Exchange. All submissions should refer to file number SR-BSE-99-04 and 
should be submitted by June 20, 1999.

    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. 99-12665 Filed 5-19-99; 8:45 am]
BILLING CODE 8010-01-M