[Federal Register Volume 69, Number 109 (Monday, June 7, 2004)]
[Notices]
[Pages 31851-31856]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12783]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-49771; File No. SR-BSE-2003-09]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment Nos. 1 and 2 Thereto by the Boston Stock Exchange, 
Inc. Relating to the Extension of Certain Listed Trading Rules to the 
Trading of Nasdaq Securities

May 25, 2004.
    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 2, 2003, the Boston Stock Exchange, Inc. (``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 Exchange. On April 
5, 2004, the Exchange amended the proposed rule change.\3\ On May 6, 
2004, the Exchange amended the proposed rule change.\4\ 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 letter from John Boese, Vice President, Legal and 
Compliance, Exchange, to Nancy Sanow, Assistant Director, Division 
of Market Regulation (``Division''), Commission, dated April 2, 2004 
(``Amendment No. 1''). In Amendment No. 1, the Exchange restated the 
proposed rule change in its entirety.
    \4\ See letter from John Boese, Chief Regulatory Officer, 
Exchange, to Nancy Sanow, Assistant Director, Division, Commission, 
dated May 5, 2004 (``Amendment No. 2''). In Amendment No. 2, the 
Exchange restated the proposed rule change in its entirety.

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[[Page 31852]]

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange seeks to extend certain of its listed trading rules to 
the trading of Nasdaq securities. The text of the proposed rule change, 
as amended, is set forth below. Proposed new language is in italics.
* * * * *

Chapter XXXV Trading in Nasdaq Securities

Competing Specialist Initiative

    Section 30. Any specialist can apply to the Exchange to function as 
a competing specialist pursuant to these procedures:
    1. Applications to compete must be directed to the Market 
Performance Committee in writing and must list in order of preference 
the stock(s) in which the applicant intends to compete. The Market 
Performance Committee will use the following guidelines in reviewing an 
application:
     Overall performance evaluation results of the applicant
     Financial capability
     Adequacy of manpower on the floor
     Objection by the regular specialist in a stock, with or 
without cause
    2. Objections to Competition
    a. Any objection \1\ by the regular specialist to permit 
competition in one or more of such specialist's stocks must be in 
writing on a form designated by the Exchange and filed with the 
Exchange within 24 hours \2\ of notice \3\ of the competing 
specialist's application.
    b. A Market Performance Committee meeting will be scheduled to 
review the reasons for objection, and to determine whether an entering 
competitor could jeopardize the fair and orderly market maintained by 
the regular specialist in relation to the stock at issue. The regular 
specialist will be permitted to appear before the Committee to give the 
Committee the opportunity to question the regular specialist in regard 
to the reasons for objection. The applicant (competitor) will also be 
permitted to appear before the Committee to respond to any issues 
raised. After the Market Performance Committee renders its decision, 
either party may appeal to the Executive Committee and then, if 
necessary, to the Board of Governors.\4\
    c. Pending Market Performance Committee review of any objection, 
competition in the security may be permitted upon the affirmative 
determination of a majority of the floor members of the Market 
Performance Committee, based on the standard set forth in Paragraph b. 
of this Section 30. Pending the outcome of any appeal process, 
competition in the security at issue will be permitted. The results of 
such competition may be used by either the regular specialist in 
support of their objection, or considered by the Market Performance 
Committee, Executive Committee, or Board of Governors, in their 
respective determinations.
    3. All applicants must be registered with the Exchange as 
specialists and must meet the current minimum requirements for 
specialists set forth in Chapter XV, the minimum capital and equity 
requirements as set forth in Chapters VIII and XXII of the Rules of the 
Exchange, and conform to all other performance requirements and 
standards set forth in the Rules of the Exchange. A competing 
specialist will be subject to all of the rules and policies applicable 
to a regular specialist.
    4. All applicant organizations, existing or newly created, must 
satisfy the Market Performance Committee that they have sufficient 
manpower to enable them to fulfill the functions of a specialist as set 
forth in Chapter XV in all of the stocks in which the applicant will be 
registered either as a regular or a competing specialist.
    5. The regular specialist will receive all order flow not 
specifically directed to a competitor.
    6. The specialist/competing specialist is responsible for all 
orders directed to him/her.
    7. In any competitive situation, if either the regular specialist 
to whom a stock was originally assigned or the specialist organization 
which subsequently received approval to compete with the regular 
specialist desires to terminate the competition by requesting that it 
be relieved of the stock that is the subject of the competition, it 
should so notify the Market Performance Committee at least three 
business days prior to the desired effective date of such withdrawal. 
When the regular specialist requests to be relieved of a stock, the 
stock shall be posted for reallocation by the Stock Allocation 
Committee. In the interim, if the Market Performance Committee is 
satisfied that the competing specialist can continue to maintain a fair 
and orderly market in such stock, the competing specialist shall serve 
as the regular specialist until the stock has been reallocated.\5\ 
Where there is more than one competing specialist in the stock, 
Exchange staff shall place the stock with a caretaker until 
reallocation.
    8. Any competing specialist who withdraws his/her registration in a 
stock will be barred from applying to compete in that same stock for a 
period of ninety (90) days following the effective date of withdrawal.
    9. Notwithstanding the existence of competing specialist 
situations, there is only one Exchange market in a security subject to 
competition. Due to the ease of communications on the Floor via the 
Stentofon System, it will not be necessary to locate competing 
specialists adjacent to each other. However, all specialists must be 
responsible for their portion of the published bid and/or offer, and 
the Exchange's Nasdaq trading system will update quotations 
accordingly. Also, competitors must cooperate with the regular 
specialist regarding openings and reopenings to ensure that they are 
unitary.
    10. Because there is only one Exchange market in a security subject 
to competition, all limit orders sent to the Exchange will be 
maintained by the Exchange's Nasdaq trading system's central limit book 
and will be executed strictly according to time priority as to receipt 
of the order in the system, irrespective of firm order routing 
procedures. This rule shall not be applicable where the quotation on 
the book is for the account of a specialist/competing specialist and 
another specialist/competing specialist has received an order directed 
to him. In such event, the specialist/competing specialist can elect to 
execute the order for his own account at the same price as the other 
specialist/competing specialist's order, or a better price, or to 
permit the order to be executed against the specialist/competing 
specialist's quotation.
    11. Competing specialists must keep each other informed and 
communicate to inquiring Floor brokers the full size of any executable 
``all or none'' orders in their possession since all-or-none orders 
cannot be represented in the published quote. The competing specialists 
are expected to represent such orders on a ``best efforts'' basis to 
ensure the execution of the entire order at a single price or prices, 
or not at all.
    12. The registration of any competing specialist may be suspended 
or terminated by the Market Performance Committee upon a determination 
of any substantial or continued failure by such competing specialist to 
engage in dealings in accordance with the Constitution and Rules of the 
Exchange.
    \1\ Only the regular specialist can object to competition in his/
her stocks.
    \2\ Unless the regular specialist is unavailable, in which case 
within 24 hours of becoming available.
    \3\ Once an application is received by the Exchange, notification 
will be issued to the regular specialist(s) in whose stocks competition 
is being sought.

[[Page 31853]]

    \4\ All appeals must be submitted within ten (10) business days of 
the final decision of either the Market Performance Committee or the 
Executive Committee.
    \5\ Once the stock has been reallocated to a regular specialist, 
that specialist shall not be permitted to object to competition in such 
stock.

Remote Trading in Nasdaq Securities

    Section 31. Nasdaq trading terminals and related equipment will be 
provided by the Exchange to remote member firm locations for specialist 
trading. The remote terminals will be linked to the Exchange's Nasdaq 
trading system and will provide the same functionality as is available 
to on-floor specialists. The following shall apply to specialists 
participating in Nasdaq Remote trading:
    (a) All rules and policies of the Board of Governors of the 
Exchange shall apply except as specifically excluded or amended under 
this section.
    (b) Any eligible firm may apply to the Market Performance Committee 
to participate in remote trading. All applicants must meet the current 
minimum requirements for Nasdaq specialists set forth in Chapters XV 
(Specialists) and XXXV (Trading in Nasdaq Securities) including, but 
not limited to their background, experience, staffing, training 
procedures, adequacy of applicant's proposed confidentiality policy, 
adequacy of applicant's contingency plans for communication or 
technology failures, adequacy of applicant's offsite facilities, 
performance standards and the minimum margin, capital and equity 
requirements as set forth in Chapters VIII and XXII of the Rules of the 
Exchange, and conform to all other performance requirements and 
standards set forth in the Rules of the Exchange.
    (c) Unless the Market Performance Committee specifically authorizes 
otherwise, participating member firms shall be prohibited from trading 
remotely any Nasdaq securities which are currently being traded on-
floor by that individual member firm. In evaluating a member firm's 
petition for changing the location of where a particular security is 
traded, the Market Performance Committee shall consider the application 
in light of the requirements set forth in paragraph (b) above. 
Individual securities, however, may not be traded by one specialist 
firm in more than one location under any circumstances.
    (d) All rule references pertaining to the trading floor of the 
Exchange, including:
    Chapter I-B, Section 2 (``Dealings on Floor--Hours'');
    Chapter I-B, Section 3 (``Dealings on Floor--Persons'');
    Chapter II, Section 2 (``Recording of Sales'');
    Chapter II, Section 6 (``Bids and Offers for Stocks'');
    Chapter II, Section 9 (``Trading for Joint Account'');
    Chapter II, Section 10 (``Discretionary Transactions'');
    Chapter II, Section 13 (``Trading Against Privileges'');
    Chapter II, Section 15 (``Record of Orders from Offices to 
Floor'');
    Chapter II, Section 23 (``Dealing on Other Exchanges, or Publicly 
Outside the Exchange'');
    Chapter II, Section 31 (``Offering Publicly on the Floor'');
    Chapter VIII, Section 2 (``Member Organization Account'');
    Chapter XV, Section 1 (``Registration'');
    Chapter XV, Section 2 (``Responsibilities'');
    Chapter XV, Section 3 (``Code of Acceptable Business Practices for 
Specialists'');
    Chapter XV, Section 5 (``Preference on Competitive Basis'');
    Chapter XV, Section 6 (``The Specialist's Book'');
    Chapter XV, Section 9 (``Opening Listed Stock'');
    Chapter XV, Section 10 (``Hours'');
    Chapter XV, Section 16 (``Status of Orders When Primary Market 
Closed'');
    Chapter XV, Section 18 (``Procedures for Competing Specialists'');
    Chapter XV (``Special Offerings'');
    Chapter XVIII, Section 1 (``Penalties'');
    Chapter XVIII, Section 4 (``Imposition of Fines for Minor 
Violation(s) of Rules and Floor Decorum Policies'');
    Chapter XX, Section 6 (``Gratuities'');
    Chapter XXII, Section 2 (``Capital and Equity Requirements'');
    Chapter XXXI, Section 2 (``Intermarket Trading System'');
    Chapter XXXI, Section 3 (``Pre-Opening Application'');
    Chapter XXXIV (``Minor Rule Violations''); and
    Chapter XXXV (``Trading in Nasdaq Securities'')
shall be deemed to include any trading done remotely through the 
Exchange's Nasdaq trading system, and all such trades shall be deemed 
to be Boston executions on the Exchange.
    (e) A written confidentiality policy regarding the location and 
access to information, terminals and equipment must be adopted by the 
firm and filed with and approved by the Exchange prior to the 
commencement of remote trading. Moreover, this policy must conform to 
all of the requirements set forth in the Rules of the Exchange, 
including, but not limited to Chapter XV, Section 6 (The Specialist 
Book), Chapter II, Section 36 (Specialist Member Organizations 
Affiliated with an Approved Person), and Section 37 (ITSFEA 
Procedures). In accordance therewith, reasonable principles must be 
applied to limit access by non-specialists to Remote Specialist 
facilities and information, and to limit Remote Specialists access to 
and from other proprietary trading venues, including access from outcry 
or visible communication, intentional or otherwise.
    (f) Floor policies regarding dress code, and smoking shall not 
apply. Access to the area designated as that of the Remote Specialist's 
shall be restricted to the specialist, backup specialist, clerks and 
designated management of the specialist (operation), and Exchange 
authorized personnel, consistent with the Rules of the Exchange, 
including, but not limited to, ``Chinese Wall'' procedures set forth in 
Chapter II, Section 36 (Specialist Member Organizations Affiliated with 
an Approved Person), and procedures set forth in Chapter XV, Section 6 
(The Specialist's Book).
    (g) All Exchange correspondence, memoranda, bulletins and other 
publications shall be sent to the Exchange's Nasdaq Remote Specialists 
via electronic means and via U.S. mail or overnight delivery.
    (h) All Exchange Nasdaq Remote Specialists will have stentofon (or 
a similarly operational speakerphone), as well as dedicated telephone 
access, to the physical trading floor. Any regulatory requirements 
including trading halts, trading practices, policies, procedures or 
rules requiring floor official involvement will be coordinated by 
Exchange personnel with the remote specialist through the dedicated 
telephone line.
    (i) Servicing of the Exchange's Nasdaq trading system terminals and 
related equipment shall be by Exchange authorized and trained personnel 
only.
    (j) The Exchange's examination program of non-DEA floor members 
would include the remote specialist operations. Every firm must submit 
specific supervisory procedures relating to the Remote Specialist 
operations and appropriate identification of all individuals who will 
have access to the Remote Specialist operation, including all 
supervisory personnel.
    (k) Any arbitration or disciplinary action arising out of trading 
activity pursuant to this section would be held

[[Page 31854]]

at the physical offices of the Exchange located in Boston.
    (l) Each remote Nasdaq terminal assigned and registered by the 
Exchange will require an ETP, and will be subject to the following:
    (1) Each Specialist unit must have at least one registered Exchange 
seat assigned to the approved specialist.
    (a) A specialist may be authorized to obtain additional ETP's for 
qualified registered clerks to access the BSE's Nasdaq Trading System 
in support of the Specialist unit.
    (b) All specialists and registered clerk ETP holders must be 
approved by the Market Performance Committee and must meet the 
following:
    (i) file an ETP application form with the BSE Surveillance 
Department;
    (ii) completion of the required floor training program; *
    (iii) successful completion of the BSE floor examination within 90 
days of application;
    (iv) successful completion of the Series 63 (NASAA Uniform State 
Law Exam), and registration with the Commonwealth of Massachusetts, 
and;
    (v) submission of fingerprint records to the BSE.
    (2) Each Specialist unit identified by the member firm will be 
assigned an account (``give up'') and will be evaluated under the 
Exchange's Specialist Performance Evaluation Program (``SPEP'') which 
currently measures performance in several separate categories 
comprising a relative overall performance ranking.

Commentary: . . .

    The Market Performance Committee of the Exchange will consider firm 
applicants based on a variety of criteria, as identified in Section 
31(b), above, including, but not limited to, adequate off-site 
facilities to ensure compliance with the referenced portions of the 
Exchange's rules, and adequate capital to manage the risks associated 
with this program. For every applicant specialist who is not an 
existing on-floor specialist, a two week on-floor training period will 
be required, among the purposes of which will be to benefit the 
relationship between the Boston floor and the remote specialist.
    * Training: On-site floor training for at least two weeks would be 
waived for current floor specialists and registered clerks who transfer 
to remote specialist operations. The two-week on-site floor-training 
period could also be waived in exceptional circumstances, if other 
arrangements are made with and approved by the Exchange. In such 
exceptional circumstances, a waiver will only be permitted if the 
Exchange is assured that the person requesting the waiver has made 
other arrangements that ensure that the person meets all of the 
requirements listed below. However, the two week on-site floor training 
period will not be waived for easily remedied reasons such as 
geographical location or inconvenience, and will include, among other 
things:
    (1) Questioned trade procedures;
    (2) Communication procedures with Floor Members, Front Desk 
Operations, Surveillance, and Systems Support;
    (3) Competing Specialist Initiative (``CSI'') and Unlisted Trading 
Privilege (``UTP'') applications and procedures;
    (4) Stock allocation procedures;
    (5) Book or symbol change procedures;
    (6) Trading Halt procedures;
    (7) Floor official rulings;
    (8) Authorizations required for billing, withdrawals, and payment 
of fines where applicable;
    (9) Minor Rule Plan Violations policies and application;
    (10) Books and records/reports available;
    (11) Explanation of the SPEP categories and similar measurements 
and procedures;
    (12) Certain other rules and policies deemed appropriate by the 
Exchange (e.g. Limit Order Display Rule, auto-executions, Price 
Improvement, etc.).
* * * * *

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, as 
amended. 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 proposes to add two new sections to Chapter XXXV of 
its Rules related to the trading of Nasdaq securities on the Exchange. 
Both new sections are already existing sections of the BSE rules set 
forth in other chapters, but are not specifically tailored to the 
trading of Nasdaq securities on the Exchange. For clarity, the Exchange 
is seeking to reprint these already existing sections of their rules in 
Chapter XXXV, with minor revisions so that they are specifically 
adapted to the trading of Nasdaq securities on the Exchange.
    The first section proposed to be added is a reprint of Chapter XV, 
Dealer Specialists, Section 18, Procedures for Competing Specialists, 
with minor revisions. This would permit specialists who trade Nasdaq 
securities on the BSE to avail themselves of the Exchange's competing 
specialist program. The only changes to the current rule would be to 
replace references to ``BEACON,'' which is the BSE's trading system for 
listed securities, with references to the ``BSE's Nasdaq Trading 
System.'' Otherwise, all provisions of the Competing Specialist 
Initiative, would apply to the trading of Nasdaq securities in the same 
way as they do to the trading of listed securities.
    The second proposed addition to the Exchange's Nasdaq Trading Rules 
would be to extend the BSE's BEACON Remote trading program to include 
Nasdaq trading. As such, the Exchange would republish, in large part, 
its remote trading rules located in Chapter XXXIII, BEACON, Section 9, 
BEACON Remote, as a new section in Chapter XXXV, Trading in Nasdaq 
Securities. The substance of the rule would not change. For instance, 
all requirements relating to the applicability of other BSE Rules, 
confidentiality, ``Chinese Walls,'' communications, and Electronic 
Trading Permits would still apply. The only deletions or amendments 
would be those necessary to make the rule applicable to the Nasdaq 
program, and would be administrative and non-substantive in nature.
    The Exchange would leave certain provisions of the existing BEACON 
Remote Rule out of the new section being proposed for the remote 
trading of Nasdaq securities. For instance, in the introduction to the 
BEACON Remote Rule, there is a reference to ``ITS.'' The sentence 
containing that reference would be dropped from the proposed Remote 
Nasdaq Rules as ITS is not utilized by the Exchange for transactions in 
Nasdaq securities. Also, Paragraph (e) of the BEACON Remote Rule would 
be eliminated in the proposed Remote Nasdaq rules because the Exchange 
does not have a similar limitation for specialists who trade Nasdaq 
securities. Likewise, since Paragraph (f) of the BEACON Remote Rule 
refers to BEACON drop copy, it would not be applicable to the trading 
of trading Nasdaq securities on the exchange, since Nasdaq securities 
are not traded on the Exchange's BEACON system, and the concept of 
``drop copy''

[[Page 31855]]

is a BEACON system feature. And, in proposed Paragraph (f), the 
Exchange would not include the negative references to ``identification 
and visitors'' which are included in the counterpart Paragraph (i) of 
the BEACON Remote Rule. This is because the Exchange has deemed these 
to be important provisions which should be included in the procedures 
and policies of a firm that wishes to trade Nasdaq securities remotely 
on the BSE. Finally, the Exchange is proposing to omit much of the 
Commentary from the BEACON Remote Rule in its Remote Nasdaq Rule 
proposal due to the fact that the Commentary was largely devoted to the 
initial stages of the remote trading program. Since the Exchange has 
been trading remotely for over four years, it considers the initial 
stages of the program to have concluded.
    As with current BEACON Remote locations, the Exchange's Compliance 
Department would physically inspect each remote Nasdaq location. A 
written approval form detailing the physical layout of each location 
would be required to be executed by and filed with the Exchange prior 
to the commencement of any trading activity from the remote location. 
The written approval form would detail the measures taken by the firm 
to limit access to the remote specialist, with particular attention 
directed to the steps taken to comply with (i) ``Chinese Wall'' 
procedures set forth in Chapter II, Section 36 (Specialist Member 
Organizations Affiliated with an Approved Person), (ii) Chapter XV, 
Section 6 (The Specialist Book), and (iii) Chapter II, Section 37 
(ITSFEA Procedures). The Exchange also would reserve the right to 
inspect the premises of all remote specialists, with or without notice, 
during reasonable business hours, at any point during which the 
specialist is actively trading on the BSE, in addition to routinely 
scheduled physical inspections.
    In order that the Exchange would be able to individually identify 
and associate a remote Nasdaq terminal with an individual specialist or 
clerk, the Exchange is seeking to copy those provisions of the BEACON 
Remote Rule relating to Electronic Trading Permits (``ETPs''). The ETPs 
are non-transferable permits that would be primarily used for 
surveillance purposes. The Exchange would specifically authorize and 
approve each ETP based on certain qualifications, and the ETP would be 
required in addition to the Exchange's membership conditions.
    The ETP provisions, among other things, require that all registered 
specialists and clerks complete a floor-training program, unless waived 
as discussed below, as well as successfully complete the BSE floor 
examination and the Series 63 (NASAA Uniform State Law Exam). The two-
week floor-training program would be waived for current floor 
specialists and registered clerks who transfer to remote specialist 
operations. The training period could also be waived for other people 
in exceptional circumstances, if other arrangements were to be made and 
approved by the Exchange. In such exceptional circumstances, a waiver 
would only be permitted if the Exchange was assured that the person 
requesting the waiver has made other arrangements that ensure that the 
person would meet all of the training requirements listed in the 
proposal.\5\ However, the two-week on-site training period would not be 
able to be waived for easily remedied reasons such as geographical 
location or inconvenience. Furthermore, each registered clerk in a 
remote location, who qualifies for an ETP, would be required to operate 
under the direct supervision of a registered specialist, just as a 
registered clerk is supervised in the on-floor environment.
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    \5\ According to the BSE, the on-site floor training includes, 
among other things: communication procedures with Front Desk 
Operations, Surveillance, Systems Support; Competing Specialist 
Initiative and Unlisted Trading Privilege applications and 
procedures; stock allocation procedures; trading halt procedures; 
and books and records/reports available.
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2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b)(5) of the Act \6\ in that it is 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.
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    \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, as 
amended, 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

    No written comments were solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. by order approve such proposed rule change, as amended, or
    B. institute proceedings to determine whether the proposed rule 
change, as amended, should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, 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-2003-09 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-2003-
09. This file number should be included on the subject line if e-mail 
is used. To help the 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

[[Page 31856]]

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-
2003-09 and should be submitted on or before June 28, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-12783 Filed 6-4-04; 8:45 am]
BILLING CODE 8010-01-P