[Federal Register Volume 65, Number 132 (Monday, July 10, 2000)]
[Notices]
[Pages 42408-42409]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17331]



[[Page 42408]]

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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-42999; File No. SR-BSE-00-07]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Boston Stock Exchange, 
Inc. Relating to Mandatory Decimal Pricing Testing

June 30, 2000.
    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 27, 2000, the Boston Stock Exchange, Inc. (``BSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II, and III below, which Items have been prepared by the 
Exchange. The Exchange has designated this proposal as one concerned 
solely with the administration of the Exchange under Section 
19(b)(3)(A)(iii) of the Act,\3\ which renders the proposal effective 
upon filing with the Commission. 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.
    \3\ 15 U.S.C. 78s(b)(3)(A)(iii).
---------------------------------------------------------------------------

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

    The BSE proposes to add rules relating to decimal pricing testing 
in order to prepare for the industry-wide conversion to decimal 
pricing. The text of the proposed rule change is available at the BSE 
and at the Commission.

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

1. Purpose
    The purpose of the proposed rule change is to add Section (10) 
(Decimal Pricing Testing) to Chapter XXXIII, Boston Exchange Automated 
Communication Order-routing Network (BEACON). Specifically, the 
Exchange seeks to change its rules to require member firms to 
participate in industry-wide testing of computer systems, as required, 
in order to prepare for the conversion to decimal pricing.
    The Exchange, in cooperation with other self-regulatory 
organizations (``SROs'') has been preparing for a successful industry-
wide conversion to decimal pricing. As several other SROs have proposed 
rules to require decimal testing by their members, the Exchange seeks 
to codify this requirement as well. The new Rule will require mandatory 
participation of Exchange members in the testing which will be taking 
place, and will require any firm which has an electronic interface with 
the Exchange to conduct testing between the electronic interface and 
the Exchange (``point-to-point testing''). In the case of a member firm 
that has an electronic interface through a third party service 
provider, point-to-point testing with the Exchange will not be required 
if (i) the member firm conducts successful testing with the service 
provider, (ii) the service provider conducts successful testing with 
the Exchange (on behalf of the member firm) and (iii) the Exchange 
agrees that no further testing is necessary.
    The proposed Rule also details the reporting and documentation 
requirements for all members participating in either the point-to-point 
testing or the industry-wide testing. Specifically, member firms will 
be asked to provide reports as determined necessary by the Exchange 
throughout the course of testing. Additionally, all member firms will 
be required to keep, and make available for inspection, documentation 
of all the testing they do as part of the requirements of this Rule.
2. Statutory Basis
    The Exchange represents that the statutory basis for the proposed 
rule change is Section 6(b)(5) \4\ of the Act, in that it 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.
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 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 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 solicited or received with respect to the 
proposed rule change.

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

    The foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) of the Act \5\ and subparagraph (f)(3) of Rule 19b-4 
thereunder \6\ because it is concerned solely with the administration 
of the Exchange. At any time within 60 days of the filing of the 
proposed rule change, the Commission may summarily abrogate the 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.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78s(b)(3)(A).
    \6\ 17 CFR 240.19b-4(f)(3).
---------------------------------------------------------------------------

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

[[Page 42409]]

available for inspection and copying in the Commission's Public 
Reference Room in Washington, D.C.
    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-00-07 and should be submitted by July 31, 
2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Jonathan G. Katz,
Secretary.
[FR Doc. 00-17331 Filed 7-7-00; 8:45 am]
BILLING CODE 8010-01-M