[Federal Register Volume 64, Number 206 (Tuesday, October 26, 1999)]
[Notices]
[Page 57676]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27891]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42034; File No. SR-BSE-99-14]


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

October 19, 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 September 30, 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 BSE. 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.
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    The Exchange proposes to amend its Transaction Fee Schedule to 
revise the monthly transaction related revenue the BSE must generate 
before it shares excess revenue with eligible member firms.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with 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 Section 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 minimum amount of monthly transaction related revenue 
that the BSE must generate before it shares excess revenue with 
eligible member firms is $1,300,000.\3\ The BSE proposes to revise this 
amount to $1,400,000 to meet the budgeted costs of operating the 
Exchange in the upcoming fiscal year.
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    \3\ Eligible member firms receive excess revenue in the form of 
a credit that is 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). A member firm that 
generates at least $50,000 in BSE automated transaction fees is 
eligible to share in excess revenue. See Securities Exchange Act 
Release No. 41809 (Aug. 30, 1999), 64 FR 48887 (Sept. 8, 1999).
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2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Act,\4\ in general, and furthers the objectives of Section 6(b)(4),\5\ 
in particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among its 
members.\6\
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(4).
    \6\ 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 11Ac1-3 
under the Act, 17 CFR 240.10b-10 and 17 CFR 240.11Ac1-3, 
respectively.
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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 
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 \7\ and Rule 
19b-4(f)(2) \8\ thereunder. 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.\9\
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    \7\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \8\ 17 CFR 240.19b-4(f)(2).
    \9\ 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).
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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 the 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-99-14 and 
should be submitted by November 16, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc 99-27891 Filed 10-25-99; 8:45 am]
BILLING CODE 8010-01-M