[Federal Register Volume 67, Number 180 (Tuesday, September 17, 2002)]
[Notices]
[Pages 58661-58662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23532]


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

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46480; File No. SR-BSE-2002-07]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Order 
Approving Proposed Rule Change Relating to Competing Specialists and 
Objections to Competing Specialist Competition

September 10, 2002.

I. Introduction

    On June 25, 2002, 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 competing specialists and objections to 
competing specialist competition. The proposed rule change was 
published for comment in the Federal Register on July 30, 2002.\3\ No 
comments were received on the proposal. This order approves the 
proposed rule change.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 46238 (July 19, 
2002), 67 FR 49378.
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange proposes to amend the section of the Exchange's 
Competing Specialist Initiative (``CSI'') procedures relating to 
objections to competition filed by a regular specialist. The Exchange 
is seeking to implement a procedure that would permit competition 
pending a final review of any objection to competition filed by a 
regular specialist.
    Under current CSI procedures set forth in Chapter XV, Dealer 
Specialists, Section 18, Procedures for Competing Specialists, any 
objection to competition by a regular specialist will prevent a 
competing specialist from trading, and competing with the regular 
specialist, in the security at issue, until the objection is 
adjudicated by the Exchange's Market Performance Committee (``MPC''). 
In order to streamline this process, the Exchange is proposing that a 
majority of the floor members of the MPC be able to vote to permit 
competition in a security pending the formalization of a regular 
specialist's objection and the subsequent convening of a full meeting 
of the MPC to review the objection.

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 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.\6\
---------------------------------------------------------------------------

    \4\ 15 U.S.C. 78f(b).
    \5\ 15 U.S.C. 78f(b)(5).
    \6\ In approving this proposal, the Commission has considered 
the proposed rule's impact on efficiency, competition and capital 
formation 15 U.S.C. 78c(f).
---------------------------------------------------------------------------

    The Commission believes that the proposal should enhance 
competition to the ultimate benefit of investors, while still offering 
the regular specialist the opportunity to formalize an objection, and 
have that objection fully considered. Moreover, the Commission

[[Page 58662]]

believes that the proposal should prevent a disingenuous regular 
specialist from abusing the competition objection process by objecting 
to specialist competition solely as leverage for objections unrelated 
to specialist competition.

IV. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\7\ that the proposed rule change (SR-BSE-2002-07) is hereby 
approved.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\8\
---------------------------------------------------------------------------

    \8\ 17 CFR 200.30-2(a)(12).
---------------------------------------------------------------------------

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-23532 Filed 9-16-02; 8:45 am]
BILLING CODE 8010-01-P