[Federal Register Volume 68, Number 83 (Wednesday, April 30, 2003)]
[Notices]
[Pages 23169-23170]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-10603]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-47720; File No. SR-BSE-2003-02]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Boston Stock Exchange, 
Inc. Relating to Extending Its Operating Hours for the Trading of 
Nasdaq Securities

April 23, 2003.
    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 March 17, 2003, the Boston Stock Exchange, Inc. (``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. On April 10, 2003, the 
Exchange filed Amendment No. 1 to the proposed rule change.\3\ The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ In Amendment No. 1, the Exchange amended the proposal to 
state that it deemed the proposed rule change to be non-
controversial in nature (rather than concerned solely with the 
administration of the Exchange) and sought immediate effectiveness 
of the proposed rule change pursuant to Section 19(b)(3)(A) of the 
Act and waiver of the 30-day operative period for the effectiveness 
of the rule change proposal. See Letter dated April 10, 2003, from 
John Boese, Vice President, Legal and Compliance, Exchange, to 
Katherine England, Assistant Director, Division of Market 
Regulation, Commission. For purposes of calculating the 60-day 
period within which the Commission may summarily abrogate the 
proposed rule change under Section 19(b)(3)(C) of the Act, the 
Commission considers that the period to commence on April 10, 2003, 
the date the Exchange filed Amendment No. 1. See 15 U.S.C. 
78s(b)(3)(C).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange seeks to amend the Nasdaq trading rules set forth in 
the Rules of the Board of Governors of the Exchange to allow for 
extended hours for the trading of Nasdaq securities.
    Set forth below is the text of the proposed rule change. Proposed 
new language is italicized; proposed deletions are in brackets.
* * * * *
Chapter XXXV
Trading in Nasdaq Securities
* * * * *
Dealings on the Floor--Hours
    Section 8. [Pursuant to Chapter I-B, Sec. 2, Dealings on the 
Floor--Hours, no member or member organization shall make any bid, 
offer or transaction upon the floor of the Exchange, issue a commitment 
to trade through ITS or send an order for a Nasdaq security to a Nasdaq 
System market maker other than during the hours the Exchange is open 
for the transaction of business. Nasdaq securities will not be eligible 
to participate in the Post Primary Session.] For the purposes of 
transacting business in Nasdaq securities only, the Exchange shall be 
open from 7 a.m. until 6:30 p.m. Only transactions in Nasdaq securities 
will be permitted outside the hours of 9:30 a.m. and 4:15 p.m., in 
accordance with Chapter I-B, Business Hours, Section 1, Primary 
Session, and Section 1(a) Post Primary Session.
* * * * *

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 Exchange is proposing an alteration of the hours the Exchange 
is to be open for trading Nasdaq securities. Presently, Chapter XXXV of 
the Rules, Trading in Nasdaq Securities, Section 8, Dealings on the 
Floor--Hours, limits the hours of trading in Nasdaq securities on the 
Exchange to the hours of 9:30 a.m. to 4 p.m. The Exchange would delete 
the present rule and replace it with one which would permit the 
transaction of business, in Nasdaq securities only, between the hours 
of 7 a.m. and 6:30 p.m. The Exchange believes that such an extension of 
hours would allow Exchange members who trade Nasdaq securities to 
remain competitive with their counterparts on other exchanges that 
trade Nasdaq securities pursuant to unlisted trading privileges, as 
well as NASD members who are permitted to conduct transactions in 
Nasdaq securities during this extended period. Furthermore, the 
Exchange believes that such extended hours are contemplated and 
permitted by Article XI of the Joint Self-Regulatory Organization Plan 
Governing the Collection, Consolidation and Dissemination of Quotation 
and Transaction Information for Nasdaq-Listed Securities Traded on 
Exchanges on an Unlisted Trading Privilege Basis (``OTC/UTP Plan'') \4\
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    \4\ The OTC/UTP Plan was initially approved in 1990. See 
Securities Exchange Act Release No. 28146 (June 26, 1990), 55 FR 
27917 (July 6, 1990). It has subsequently been amended. See also 
Securities Exchange Act Release Nos. 34371 (July 13, 1994), 59 FR 
37103 (July 20, 1994); 35221 (January 11, 1995), 60 FR 3886 (January 
19, 1995); 36102 (August 14, 1995), 60 FR 43626 (August 22, 1995); 
36226 (September 13, 1995), 60 FR 49029 (September 21, 1995); 36368 
(October 13, 1995), 60 FR 54091 (October 19, 1995); 36481 (November 
13, 1995), 60 FR 58119 (November 24, 1995); 36589 (December 13, 
1995), 60 FR 65696 (December 20, 1995); 36650 (December 28, 1995), 
61 FR 358 (January 4, 1996); 36934 (March 6, 1996), 61 FR 10408 
(March 13, 1996); 36985 (March 18, 1996), 61 FR 12122 (March 25, 
1996); 37689 (September 16, 1996), 61 FR 50058 (September 24, 1996); 
37772 (October 1, 1996), 61 FR 52980 (October 9, 1996); 38457 (March 
31, 1997), 62 FR 16880 (April 8, 1997); 38794 (June 30, 1997), 62 FR 
36586 (July 8, 1997); 39505 (December 31, 1997), 63 FR 1515 (January 
9, 1998); 40151 (July 1, 1998), 63 FR 36979 (July 8, 1998); 40896 
(December 31, 1998), 64 FR 1834 (January 12, 1999); 41392 (May 12, 
1999), 64 FR 27839 (May 21, 1999); 42268 (December 23, 1999), 65 FR 
1202 (January 6, 2000); 43005 (June 30, 2000), 65 FR 42411 (July 10, 
2000); 44099 (March 23, 2001), 66 FR 17457 (March 30, 2001); 44348 
(May 24, 2001), 66 FR 29610 (May 31, 2001); 44552 (July 13, 2001), 
66 FR 37712 (July 19, 2001); 44694 (August 14, 2001), 66 FR 43598 
(August 20, 2001); 44804 (September 17, 2001), 66 FR 48299 
(September 19, 2001); 45081 (November 19, 2001), 66 FR 59273 
(November 27, 2001); 46381 (August 19, 2002), 67 FR 164 (August 23, 
2002); 46729 (October 25, 2002), 67 FR 212 (November 1, 2002).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6 of the Act,\5\ in general, and Section 6(b)(5) of the 
Act,\6\ in particular, in that it is designed to promote just and 
equitable principles of trade, to foster cooperation and coordination 
with persons engaged in regulating securities transactions, to remove 
impediments to and perfect the mechanism of a free and

[[Page 23170]]

open market and a national market system, and, in general, to protect 
investors and the public interest.
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    \5\ 15 U.S.C. 78f.
    \6\ 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 that is not necessary or appropriate 
in furtherance of the purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received with respect 
to the proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action \7\
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    \7\ At the Exchange's request, the Commission corrected the 
rationale and the citation to the section of the Act pursuant to 
which the proposed rule change has become immediately effective. 
Telephone conversation among John Boese, Vice President, Legal and 
Compliance, Exchange; Christopher B. Stone, Special Counsel, 
Division of Market Regulation, Commission; and Ann E. Leddy, 
Attorney, Division of Market Regulation, Commission (April 21, 
2003).
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    Because the foregoing proposed rule change does not:
    (i) Significantly affect the protection of investors or the public 
interest;
    (ii) Impose any significant burden on competition; and
    (iii) Become operative for 30 days from the date on which it was 
filed, or such shorter time as the Commission may designate, it has 
become effective pursuant to Section 19(b)(3)(A) of the Act \8\ and 
Rule 19b-4(f)(6) thereunder.\9\ 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).
    \9\ 17 CFR 240.19b-4(f)(6).
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    The Exchange has requested that the Commission waive the 30-day 
operative delay. The Commission believes that waiving the 30-day 
operative delay is consistent with the protection of investors and the 
public interest. Acceleration of the operative date will allow the 
Exchange to extend the trading hours for transactions in Nasdaq 
securities with immediate effect and prevent any unfair competitive 
disadvantage with respect to the hours in which Nasdaq securities can 
be traded on the Exchange. For these reasons, the Commission designates 
the proposal to be effective and operative upon filing with the 
Commission.\10\
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    \10\ For purposes only of accelerating the operative date of the 
proposed rule change, the Commission considered the proposed rule's 
impact on efficiency, competition, and capital formation. 15 U.S.C. 
78c(f).
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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-2003-02 and should be 
submitted by May 21, 2003.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 03-10603 Filed 4-29-03; 8:45 am]
BILLING CODE 8010-01-P