[Federal Register Volume 64, Number 173 (Wednesday, September 8, 1999)]
[Notices]
[Page 48887]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23241]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41809; File No. SR-BSE-99-12]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Boston Stock Exchange, 
Inc. Amending Its Revenue Sharing Program

August 30, 1999.
    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 July 30, 1999, the Boston Stock Exchange, Inc. (``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 BSE. The Commission is publishing this 
notice of solicit comments on the proposed rule change from interested 
persons.
---------------------------------------------------------------------------

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

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

    The Exchange proposes to revise its Revenue Sharing Program to 
exclude non-BSE automated transaction fees.

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 IV below. The BSE 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 amend the Revenue 
Sharing Program highlighted on the BSE's Transaction Fee Schedule. 
Currently, the Exchange shares 50% of any excess monthly transaction 
related revenue above $1,300,000 with those firms that generate $50,000 
in both BSE and non-BSE automated transaction fees. The Exchange 
proposes to exclude non-BSE automated transaction fees from this 
computation.\3\ Thus, under the proposed rule change, only firms that 
generate $50,000 in BSE transaction fees will receive a share of excess 
revenue.\4\
---------------------------------------------------------------------------

    \3\ Non-BSE automated transactions refer to trades executed 
through the New York Stock Exchange's Designated Order Turnaround 
(DOT) system. The Exchange wishes to tailor its Revenue Sharing 
Program to apply only to Base executed transactions. Telephone 
conversation between Kathy Marshall, Assistant Vice President, 
Finance, BSE, Richard Strasser, Assistant Director, Division of 
Market Regulation (``Division''), Commission, and Sonia Patton, 
Attorney, Division, Commission, on August 26, 1999.
    \4\ Eligible firms will receive excess revenue in the form of a 
credit that will be applied toward each firm's total monthly 
transaction fees. See Securities Exchange Act Release No. 40591 
(Oct. 22, 1998), 63 FR 58078 (Oct. 29, 1998).
---------------------------------------------------------------------------

2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\5\ in general, and furthers the objectives of Section 6(b)(4) \6\ 
in particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other changes among its 
members.\7\
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4).
    \7\ The Commission notes that the filing may raise questions 
concerning payment for order flow. To the extent that it does raise 
such issues, exchange members should consider any associated 
disclosure obligations, namely pursuant to Rules 10b-10 and 11 Ac1-3 
under the Act, 17 CFR 240.10b-10 and 17 CFR 240.11Ac1-3, 
respectively.
---------------------------------------------------------------------------

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

    The Exchange has not solicited or 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 establishes or changes a due, fee, or 
other charge imposed by the BSE and, therefore, has become effective 
upon filing pursuant to Section 19(b)(3)(A)(ii) of the Act \8\ and Rule 
19b-4(f)(2) \9\ thereunder. At any time within 60 days of the filing of 
such 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.\10\
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A)(ii)
    \9\17 CFR 240.19b-4(f)(2).
    \10\ In reviewing this rule change, the Commission has 
considered the proposal's impact on efficiency, competition, and 
capital formation, consistent with Section 3 of the Act. 15 U.S.C. 
78c(f).
---------------------------------------------------------------------------

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, N.W., Washington, D.C. 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 at 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 the File No. SR-BSE-99-12 and 
should be submitted by September 29, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-23241 Filed 9-7-99; 8:45 am]
BILLING CODE 8010-01-M