[Federal Register Volume 65, Number 214 (Friday, November 3, 2000)]
[Notices]
[Pages 66270-66271]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28223]
[[Page 66270]]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-43484; File No. SR-BSE-00-17]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the Boston
Stock Exchange, Inc. Relating to Fortune Indexes
October 26, 2000.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on October 12, 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 and II 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 and to grant accelerated
approval of the proposed rule change.
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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 BSE intends to trade, via Unlisted Trading Privileges
(``UTP''), Index Fund Shares based on the Fortune 500 and Fortune e-50
Indexes pursuant to Rule 19b-4(e) under the Act.\3\ Accordingly, the
BSE proposes to amend Chapter XXIV-B, Index Fund Shares, by adding
Section 6, Fortune Indexes, to set forth various disclaimers of
liability and warranties in connection with these Indexes and trading
in Index Fund Shares. The text of the proposed rule change is available
at the principal office of the BSE and at the Commission.
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\3\ 17 CFR 240.19b-4(e).
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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 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
1. Purpose
The BSE intends to trade, via UTP, Index Fund Shares based on the
Fortune 500 and Fortune e-50 Indexes (``Indexes''), pursuant to rule
19b-4(e) under the Act.\4\ Therefore, the BSE proposes to amend Chapter
XXIV-B, Index Fund Shares, by adding Section 6, Fortune Indexes, to set
forth various disclaimers of liability and warranties in connection
with the Indexes and trading in Index Fund Shares. The proposed rule
would state, among other things, that the Indexes are licensed for use
by the Exchange in connection with the Index fund Shares; that the
Index Fund Shares have not been passed on by Fortune for suitability
for a particular use; and that the Index Fund Shares are not sponsored,
endorsed, sold, or promoted by Fortune. The proposed rule would also
state that Fortune does not warranty the accuracy or completeness of
the Indexes or the data included therein, results to be obtained from
use of the Indexes or such data, or fitness for a particular use with
respect to the Indexes or such data.
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\4\ 17 CFR 240.19b-4(e).
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2. Statutory Basis
The BSE believes that the proposed rule change is consistent with
Section 6(b) of the Act \5\ in general, and furthers the objectives of
Sections 6(b)(5) \6\ in particular, in that it is designed to promote
just and equitable principles of trade; 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.
The BSE also states that the proposed rule change is not designed to
permit unfair discrimination between customers, issuers, brokers, and
dealers.
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\5\ 15 U.S.C. 78f(b).
\6\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The BSE does not believe that the proposed rule would impose any
burden on competition.
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.
III. 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 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
Exchange. All submissions should refer to File No. SR-BSE-00-17 and
should be submitted by November 24, 2000.
IV. Commission's Findings and Order Granting Acceleratred Approval
of Proposed Rule Change
A. Generally
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities exchange.\7\
Specifically, the Commission believes that the proposal is consistent
with section 6(b)(5) of the Act \8\ because it will facilitate
transactions in securities by setting forth certain disclaimers of
liability with respect to Index Fund Shares based on the Fortune 500
and Fortune e-50 Indexes that will trade on the Exchange.\9\
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\7\ In reviewing the proposed rule change, the Commission
considered its potential impact on efficiency, competition, and
capital formation. See 15 U.S.C. 78c(f).
\8\ 15 U.S.C. 78f(b)(5).
\9\ The Commission notes that it has previously approved a
proposed rule change submitted by the BSE under Exchange Act Rule
19b-4, 17 CFR 240.19b-4(e), that established generic listing
standards for Index Fund Shares that would permit the trading of,
among other things, shares of the Fortune 500 and FORTUNE e-50
Indexes funds pursuant to UTP. See Exchange Act Release No. 34-42988
(June 28, 2000), 65 FR 42021 (July 7, 2000).
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The BSE has requested that the Commission find good cause pursuant
to Section 19(b)(2) of the Act \10\ for approving the proposed rule
change
[[Page 66271]]
prior to the thirtieth day after publication of the proposal in the
Federal Register.\11\ The Commission does not believe that this
proposal raises any new regulatory issues and notes that the proposed
rule change is nearly identical to others that have been previously
approved by the Commission.\12\ Therefore, the Commission finds that
there is good cause for approving the proposed rule change prior to the
thirtieth day after publication of the proposal in the Federal
Register.
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\10\ 15 U.S.C. 78S(B)(2).
\11\ In its initial submission to the Commission, the BSE
inadvertently requested that the Commission grant accelerated
effectiveness to the proposed rule change. The BSE has indicated
that, instead, it requested accelerated approval of the proposal.
Telephone conversation between Esther Radovsky, Listings Analyst,
BSE, and Michael Gaw, Attorney-Adviser, Division of Market
Regulation, Commission, on October 24, 2000.
\12\ See, e.g., Exchange Act Release No. 34-41664 (July 27,
1999), 64 FR 42424 (August 4, 1999) (approval of BSE rule change to,
among other things, adopt certain disclaimers of liability with
respect to Nasdaq-100 Index Fund Shares); Exchange Act Release NO.
34-41119 (February 26, 1999), 64 FR 11510 (March 9, 2000) (approval
of Amex rule change to, among other things, adopt certain
disclaimers of liability with respect to Nasdaq-100 Index Fund
Shares); Exchange Act Release No. 34-35534 (March 24, 1995), 60 FR
16686 (March 31, 1995) (approval of Amex rule change to, among other
things, adopt certain disclaimers of liability with respect to S&P
MidCap 400 Index Fund Shares).
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It Is Therefore Ordered, pursuant to Section 19(b)(2) of the
Act,\13\ that the proposed rule change (SR-BSE-00-17), is hereby
approved on an accelerated basis.
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\13\ 15 U.S.C. 78s(b)(2).
\14\ 17 CFR 200.30-3(a)(12).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\14\
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 00-28223 Filed 11-2-00; 8:45 am]
BILLING CODE 8010-01-M