[Federal Register Volume 67, Number 128 (Wednesday, July 3, 2002)]
[Notices]
[Page 44654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16691]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46123; File No. SR-BSE-2001-09]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Order 
Approving Proposed Rule Change Relating to Clearly Erroneous 
Transactions in Nasdaq Securities

June 26, 2002.

I. Introduction

    On December 26, 2001, the Boston Stock Exchange, Inc. (``BSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change related to clearly erroneous transactions in The 
Nasdaq Stock Market, Inc. (``Nasdaq'') securities. The proposed rule 
change was published for comment in the Federal Register on April 30, 
2002.\3\ No comments were received on the proposal. This order approves 
the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 45799 (April 22, 
2002), 67 FR 21304.
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II. Description of the Proposal

    The Exchange proposes to add a section to Chapter XXXV of its 
rules, which pertains to the trading of Nasdaq securities on the 
Exchange. Proposed Section 30 would govern situations in which there is 
an obvious error in any part of a Nasdaq security transaction. In large 
part, the proposed Section 30 conforms to Nasdaq Rule 11890, Clearly 
Erroneous Transactions, and obliges Exchange specialists to cooperate 
with officers of Nasdaq in their review of clearly erroneous 
transactions occurring on a Nasdaq system.

III. Discussion

    The Commission finds that the proposed rule change is consistent 
with the provisions of section 6(b) of the Act,\4\ in general, and 
section 6(b)(5) of the Act,\5\ in particular, which requires, among 
other things, that the rules of an exchange be 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 not be designed to 
permit unfair discrimination between customers, issuers, brokers or 
dealers.
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    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
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    The proposal establishes a BSE rule that is an analogue to Nasdaq 
Rule 11890(b) and (c), regarding clearly erroneous transactions. This 
rule will foster cooperation between BSE specialists and officers of 
Nasdaq who are reviewing trades on Nasdaq systems to determine if they 
are clearly erroneous. This cooperation is particularly important 
because BSE currently participates in Nasdaq's SuperSoes and SelectNet 
systems and intends to participate in Nasdaq's SuperMontage system once 
it is launched. The proposal should help to ensure that clearly 
erroneous transactions are dealt with in such a manner that a fair and 
orderly market is maintained and that investors and the public interest 
are protected.

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\6\ that the proposed rule change (SR-BSE-2001-09) is hereby 
approved.
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    \6\ 5 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-2(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-16691 Filed 7-2-02; 8:45 am]
BILLING CODE 8010-01-P