[Federal Register Volume 65, Number 135 (Thursday, July 13, 2000)]
[Notices]
[Pages 43388-43390]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-17723]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-43014; File No. SR-BSE-00-09]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Boston Stock Exchange 
Relating to Its Membership and Other Fees, Floor Operations Fees, and 
Transaction Fees Schedules

July 6, 2000.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\, notice is hereby given that on July 3, 2000, the Boston 
Stock Exchange (``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 from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
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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 the Exchange's Membership and Other 
Fees, Floor Operation Fees and Transaction Fees schedules. The proposed 
fee changes are below. Deletions are in brackets. Additions are 
italicized.

 
                        MEMBERSHP AND OTHER FEES
             (1) Membership
Membership Dues........................  $[600.00] 750.00 per membership
                                          per quarter.
 
*                  *                  *                  *
                  *                  *                  *
SRO Fee................................  $100.00 per month.
 
*                  *                  *                  *
                  *                  *                  *
     (2) Electronic File Access and
               Processing
[Open Order Match......................  $200.00 per month].
*                  *                  *                  *
                  *                  *                  *
 
                          FLOOR OPERATION FEES
 
*                  *                  *                  *
                  *                  *                  *
    (3) Specialist Trade Processing
Odd Lot Trades (Includes CSI issues)...  $[.00].05 per order ($400
                                          maximum per account).
 
*                  *                  *                  *
                  *                  *                  *
                            TRANSACTION FEES
   1. Trade Recording and Comparison
                Charges
 All other executions (excluding automated non-BSE executions)
    First 2,500 trades per month.......  $.29 per 100 shares.
    Next 2,500 trades per month........  $.25 per 100 shares.
    Next 2,500 trades per month........  $.15 per 100 shares.
    Over 7,500 trades per month........  $.04 per 100 shares.
    Floor Brokered non-BSE executions..  $.05 per 100 shares.
 

[[Page 43389]]

 
    Automated non-BSE executions.......  $.05 per 100 net non-BSE
                                          automated shares.
    Maximum charge per side (single-     $50.00.
     sided).
    Maximum charge per side (cross)....  $25.00.
   (all trades accumulate for volume
               discounts)
 
*                  *                  *                  *
                  *                  *                  *
 

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 the 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 amend the Exchange's 
Membership and Other Fees, Floor Operation Fees, and Transaction Fees 
schedules to allow the Exchange to continue to charge in an equitable 
manner for the products and services it offers while at the same time 
continuing to provide quality markets at competitive prices.
    The proposed changes to the Membership and Other Fees schedule will 
(1) eliminate the $200 per month charge for electronic file 
transmissions of Open Order Match files; (2) increase Membership Dues 
to $750 per quarter; and (3) implement a $100 per month SRO fee for 
off-floor firms. The SRO fee is being implemented to help offset the 
costs of providing and the systems necessary to monitor and maintain 
the BSE's Execution Quality Program. \2\
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    \2\ The BSE's Execution Quality Program involves building, 
maintaining, and updating the systems necessary to develop and 
provide execution quality statistics to customers and the BEAM 
system, which provides the Exchange with real-time capabilities to 
monitor specialist-trading activity. Telephone conversation between 
Kathy Marshall, Vice President-Finance, BSE, and Karl Varner, 
Special Counsel, Commission (July 7, 2000).
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    The proposed change to the Floor Operation Fees Schedule will 
implement a $0.05 per odd lot trade (trades of less than 100 shares) 
fee for all specialists. This fee will be capped at $400 per month per 
account. The BSE currently does not charge a fee for these trades. 
Because of the significant growth in volume the BSE has experienced 
from odd trading, these fees will help to fund the necessary additional 
system capacity as this business continues to grow.
    The BSE also proposed to change its Transaction Fee Schedule to now 
distinguish between BSE and non-BSE generated transaction fees for the 
purpose of capping monthly-automated transaction fees at $50,000. 
Currently, the BSE accumulates both BSE and non-BSE automated 
transaction fees when determining if a firm's monthly-automated 
transaction fees should be capped at $50,000. The BSE proposes to 
change the accumulation method to accumulate BSE automated executions 
only for purposes of the $50,000 transaction fee cap. In addition, for 
those firms that provide BSE specialists with the capability of routing 
order flow to other exchanges (for example, through DOT \3\ terminals) 
and that also route orders to the BSE, Trade Recording and Comparison 
fees on net automated non-BSE share volume will not be charged a flat 
rate of $0.05 per 100 shares as opposed to the sliding scale rates 
currently levied on non-BSE volume. For example, assume a firm that 
provides DOT services to the trading floor also routes business to the 
BSE. Also assume total volume routed to the BSE for the month is 
500,000 shares and total non-Base volume executed through their DOT 
terminals is 1,000,000 shares per month. Non-BSE shares for the month 
would be $250 (1,000,000 non-BSE shares minus 500,000 BSE 
shares=500,000 net non-BSE shares at a rate of $0.05 per 100 shares). 
However, if a firm routes more volume to the BSE than is executed 
through their DOT terminals, no fees will be charged on any of their 
automated non-BSE volume.
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    \3\ DOT is the New York Stock Exchange's (``NYSE'') Designated 
Order Turnaround System, an application that permits NYSE members to 
route market orders and day limit orders on an automated basis 
directly to the appropriate specialist on the NYSE trading floor. 
See Securities Exchange Act Release No. 16649 (March 13, 1980) 45 FR 
18541.
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    The basis for the proposed rule change is Section 6(b)(5) of the 
Act, \4\, in that the proposed rule change 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.
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    \4\ 15 U.S.C. 78f(b)(5).
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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 neither solicited nor received comments on 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 on July 3, 2000, 
pursuant to Section 19(b)(3) of the Act \5\ and subparagraph (f) of 
Rule 19b-4.\6\ 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.
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    \5\ 15 U.S.C. 78s(b)(3).
    \6\ 17 C.F.R. 240.19b-4.
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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

[[Page 43390]]

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 File No. BSE-00-09 and should be submitted 
by August 3, 2000.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-17723 Filed 7-12-00; 8:45 am]
BILLING CODE 8010-01-M