[Federal Register Volume 69, Number 103 (Thursday, May 27, 2004)]
[Notices]
[Pages 30350-30352]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-11966]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49742; File No. SR-BSE-2004-20]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Boston Stock Exchange, 
Inc. Relating to Its Boston Options Exchange Trading Rules

May 19, 2004.
    Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

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(``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given 
that on May 14, 2004, the Boston Stock Exchange (``BSE'' or 
``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 BSE. The Exchange 
has designated this proposal as constituting a stated policy, practice, 
or interpretation with respect to the meaning, administration, or 
enforcement of an existing rule of the Boston Options Exchange 
(``BOX'') facility of the BSE pursuant to section 19(b)(3)(A)(i) of the 
Act,\3\ and Rule 19b-4(f)(1) thereunder,\4\ which renders the proposal 
effective upon filing with the Commission. The Commission is publishing 
this notice to solicit comments on the proposed rule from interested 
persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(i).
    \4\ 17 CFR 240.19b-4(f)(1).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to clarify a section of the BOX rules 
relating to market opening procedures. The text of the proposed rule 
change is set forth below. Proposed new language is in italics.

Rules of the Boston Stock Exchange

Rules of the Boston Options Exchange Facility

    Trading of options contracts on BOX.

Chapter V Doing Business on BOX

Sec. 9 Opening the Market
    (a)-(d) No change.
    (e) Opening Match.
    (i) Complex Orders and contingency orders do not participate in the 
Opening Match or in the determination of the opening price. The BOX 
Trading Host will establish the opening price at the time of the 
Opening Match. The opening price is the TOP at the moment of the 
Opening Match. The BOX Trading Host will process the series of a class 
in a random order, starting at the first round minute after the opening 
for trading of the underlying security in the primary market, and at 
each round minute thereafter. If the opening of a particular class is 
to occur within 15 seconds of the next round minute, the opening of 
that class will take place at the next subsequent round minute after 
the round minute that is 15 or less seconds away (i.e., within 75 
seconds). In determining the priority of orders to be filled, the BOX 
Trading Host will give priority to Market-on-Opening orders first, then 
to Limit Orders whose price is better than the opening price, and then 
to resting orders on the BOX Book at the opening price. One or more 
series of a class may not open because of conditions cited in paragraph 
(f) of this Section 9.
* * * * *

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 BSE 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 proposes to provide clarifying language to Section 9 of 
Chapter V of the BOX Rules relating to guidelines regarding market 
opening procedures. Currently, the language of Chapter V, Section 9 
states that BOX will process the opening starting at the first round 
minute after the opening of trading of the underlying security. The 
Exchange now seeks to add clarifying language to indicate that the 
opening of trading must occur on the security's primary market. This 
would ensure that the price received is, in most instances, the most 
reliable opening price available, and will serve to assist in a fair 
and orderly opening on BOX.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) 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 remove impediments to and 
perfect the mechanism of a free and open market and a national market 
system, and protect investors and the public interest by standardizing 
procedures during market openings.
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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 Exchange does not believe that the proposed rule change will 
impose any burden on competition 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

    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 foregoing rule change has become effective pursuant to section 
19(b)(3)(A)(i) of the Act \7\ and subparagraph (f)(1) of Rule 19b-4 \8\ 
thereunder because it constitutes a stated policy, practice, or 
interpretation with respect to the meaning, administration, or 
enforcement of an existing rule of the BOX facility of the BSE. 
Accordingly, the proposal has taken effect upon filing with the 
Commission. At any time within 60 days of the filing of such 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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    \7\ 15 U.S.C. 78s(b)(3)(A)(i).
    \8\ 17 CFR 240.19b-4(f)(1).
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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 proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:
    Electronic comments:
     Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to [email protected]. Please include 
File Number SR-BSE-2004-20 on the subject line.
    Paper comments:
     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-BSE-2004-20. This 
file number should be included on the subject line if e-mail is used. 
To help the

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Commission process and review your comments more efficiently, please 
use only one method. The Commission will post all comments on the 
Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). 
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 the filing also will be 
available for inspection and copying at the principal office of the 
BSE. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-BSE-
2004-20 and should be submitted by June 17, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-11966 Filed 5-26-04; 8:45 am]
BILLING CODE 8010-01-P