[Federal Register Volume 67, Number 180 (Tuesday, September 17, 2002)]
[Notices]
[Pages 58664-58665]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23603]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-46488; File No. SR-BSE-2002-11]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment Nos. 1 and 2 by the 
Boston Stock Exchange, Inc. To Amend Its Floor Operations and 
Transaction Fees Schedules

September 11, 2002.
    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 July 22, 2002, the Boston Stock Exchange, Incorporated (``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. On August 2, 2002, the BSE amended the proposal.\3\ The BSE 
amended the proposal again on August 20, 2002.\4\ The Exchange has 
designated this proposal as one establishing or changing a due, fee, or 
other charge imposed by the BSE under section 19(b)(3)(A)(ii) of the 
Act,\5\ which renders the proposal effective upon filing with the 
Commission. The Commission is publishing this notice to solicit 
comments on the proposed rule change, as amended, from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See August 1, 2002 letter from John A. Boese, Assistant Vice 
President (``AVP''), Legal and Regulatory, BSE, to Nancy Sanow, 
Assistant Director, Division of Market Regulation (``Division''), 
SEC, and attachments (``Amendment No. 1''). Although Amendment No. 1 
makes no substantive changes to the original filing, Amendment No. 1 
completely replaces and supersedes the original filing, so as to 
ensure that the proposed rule change is in proper format.
    \4\ See August 19, 2002 letter from John A. Boese, AVP, Legal 
and Regulatory, BSE, to Nancy Sanow, Assistant Director, Division, 
SEC, and attachments (``Amendment No. 2''). Amendment No. 2 
completely replaces and supersedes Amendment No. 1 and the original 
filing. For purposes of calculating the 60-day abrogation period, 
the Commission considers the period to have begun on August 20, 
2002, the date that the BSE filed Amendment No. 2. Additionally, the 
Commission notes that the BSE inadvertently labeled the cover page 
of Amendment No. 2 incorrectly. While the cover page says 
``Amendment No. 1,'' the remaining pages are correctly labeled. The 
Commission notes this error to clarify any confusion this minor, 
technical error may cause.
    \5\ 15 U.S.C. 78s(b)(3)(A)(ii).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The BSE proposes to amend its Floor Operations and Transaction Fees 
Schedules. 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 
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 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 purpose of the proposed rule change is to amend the Exchange's 
Floor Operation Fees and Transaction Fees schedules to allow the 
Exchange to continue to charge in an appropriate and equitable manner 
for the products and services it provides to its customers. The changes 
proposed are made in conjunction with SR-BSE-2002-10, and the timing 
and implementation of this proposal will be subject to Commission 
approval of SR-BSE-2002-10. The fees that the BSE is amending in this 
proposed rule change apply to members only, and the changes are applied 
on a non-discriminatory basis.

[[Page 58665]]

    The proposed changes to the Floor Operation Fees schedule will 
separate the Specialist Trade Processing fees into two components. The 
first component, the basic Specialist Trade Processing Fee, will be 
reduced from $.75 to $.50 per order. Additionally, the requirement that 
an issue be part of the Exchange's Competing Specialist (CSI) Program 
will be removed. All stocks, regardless of whether or not they are part 
of the BSE's CSI program, will be capped at the appropriate levels. The 
Exchange believes that, because most of the stocks in the CTA top 500 
now offer competition on the BSE, the condition that a stock be part of 
the CSI program is no longer necessary. The second component proposed 
for implementation is a Specialist Clearing Fee of $.05 per trade. This 
fee will be levied on all trades executed by BSE specialists and will 
be used to offset the variable costs of providing clearing services for 
this segment of business.
    The proposed changes to the Transaction Fees schedule will 
eliminate the monthly transaction fee maximum for all automated BSE 
volume and will implement a new lower Value Charge rate for those firms 
that generate in excess of $50,000 in automated BSE transaction fees. 
Once a firm generates $50,000 in automated BSE transaction fees, the 
current $.20 per 100 shares rate will be reduced to $.035 per 100 
shares. This rate will only apply to those trades that are eligible to 
be charged this rate. Additionally, the Exchange proposes to remove the 
condition on its Value Charges invoice that only non self-directed 
market and marketable limit orders up to and including 2,500 shares are 
free. All market and marketable limit orders up to and including 2,500 
shares will now not be levied a Value Charge fee.
2. Statutory Basis
    The Exchange believes the proposed rule change is consistent with 
section 6(b) of the Act,\6\ in general, and furthers the objectives of 
section 6(b)(4) of the Act,\7\ in particular, in that the proposed rule 
change provides for the equitable allocation of reasonable dues, fees, 
and other charges among the BSE's members.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
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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 proposed rule change has become effective pursuant to section 
19(b)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of Rule 19b-4 
thereunder,\9\ because it involves a due, fee, or other charge. At any 
time within 60 days of the filing of the 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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    \8\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \9\ 17 CFR 240.19b-4(f)(2).
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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 proposal 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 5 U.S.C. 
552, will be available for inspection and copying in 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 number SR-BSE-2002-11, and should be 
submitted by October 8, 2002.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 02-23603 Filed 9-16-02; 8:45 am]
BILLING CODE 8010-01-P