[Federal Register Volume 69, Number 174 (Thursday, September 9, 2004)]
[Notices]
[Pages 54713-54714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2107]



[[Page 54713]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50302; File No. SR-BSE-2004-38]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Boston Stock Exchange, 
Inc. Relating to Fees for Market Makers on the Boston Options Exchange 
Facility

September 1, 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 August 25, 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 Exchange. The proposed rule change has 
been filed by the Exchange as establishing or changing a due, fee, or 
other charge under Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-
4(f)(2) 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)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its Fee Schedule for the Boston 
Options Exchange \5\ to allow the Exchange to charge a minimum activity 
charge (``MAC'') to Market Maker firms for options classes that have 
been trading for less than six months. Currently, the monthly MAC is 
based on the average daily trading volume for the preceding six month 
period. The proposed rule change would provide that for classes that 
have been trading for less than six months, the class would be placed 
in a MAC category based on the average daily trading volume for the 
preceding calendar months in which the class was trading for the entire 
calendar month. The text of the proposed rule change appears below. New 
text is in italics.
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    \5\ http://www.bostonoptions.com/pdf/FeeFiling SECofficial.pdf 
(Accessed Sept. 1, 2004.)
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BOSTON OPTIONS EXCHANGE FACILITY

FEE SCHEDULE

* * * * *
Sec. 3 Market Maker Trading Fees
    a. No change.
    b. Minimum Activity Charge (``MAC'')
* * * * *
1. MAC ``Levels''
    a. For Classes that have been trading for at least six calendar 
months
    The table below provides the MAC for each of the six ``categories'' 
of options classes listed by BOX. The category for each class is 
determined by its total trading volume across all U.S. options 
exchanges as determined by OCC data. The classifications will be 
adjusted at least twice annually (in January and July, based on the 
average daily volume for the preceding six month period).

------------------------------------------------------------------------
                                                         MAC per market
                                    OCC average daily       maker per
          Class category            volume (number of    appointment per
                                        contracts)            month
------------------------------------------------------------------------
A................................  >100,000...........           $15,000
B................................  50,000 to 99,999...             3,000
C................................  25,000 to 49,999...             2,000
D................................  10,000 to 24,999...               750
E................................  5,000 to 9,999.....               250
F................................  Less than 5,000....               100
------------------------------------------------------------------------

    b. For Classes that have been trading for less than six calendar 
months
    A MAC will not be applied until a class has been trading for a full 
calendar month. After a class has been trading for a full calendar 
month, the MAC category for such class will be determined, applying the 
criteria set forth in the table above, based on the average daily 
volume for such full calendar month across all U.S. options exchanges 
as determined by OCC data. The classification will be adjusted at the 
beginning of each new calendar month thereafter based on the average 
daily trading volume for the previous calendar months in which the 
options class was traded for the entire month, until the class has been 
trading for six full calendar months. Thereafter, the classification 
will be adjusted at least twice annually (in January and July, based on 
the average daily volume for the preceding six month period) as set 
forth in subsection 1.a. above. Until an options class is placed in a 
MAC category, only per contract trade execution fees will apply to 
trades in that class.
2. MAC ``Adjustments''
    No change.
* * * * *

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 allow the Exchange to 
charge a MAC to Market Maker firms for options classes that have been 
trading for less than six months. Currently, the monthly MAC is based 
on the average daily trading volume for the preceding six month period. 
The proposed rule change would provide that for classes that have been 
trading for less than six months, the class would be placed in a MAC 
category based on the average daily trading volume (as determined by 
data from the Options Clearing Corporation) for the preceding calendar 
months in which the class was trading for the entire calendar month. 
The classification would be adjusted at the beginning of each new 
calendar month

[[Page 54714]]

thereafter based on the average daily trading volume for the previous 
calendar months in which the class was trading for the entire calendar 
month, until the class has been trading for six full calendar months. 
Thereafter, the classification would be adjusted at least twice 
annually (in January and July, based on the average daily volume for 
the preceding six month period), as the rule currently provides. Until 
an options class was placed in a MAC category, only per contract trade 
execution fees would apply to trades in that class.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of 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 
it provides for the equitable allocation of reasonable dues, fees and 
other charges among Exchange 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 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 proposed rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(ii) of the Act \8\ and subparagraph (f)(2) of 
Rule 19b-4 thereunder \9\ because it changes a due, fee, or other 
charge imposed by the Exchange. 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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    \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 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-2004-38 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-2004-38. 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 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 also will be available for inspection and copying at the 
principal office of the Exchange. 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-2004-38 and should be submitted on or before 
September 30, 2004.

    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. E4-2107 Filed 9-8-04; 8:45 am]
BILLING CODE 8010-01-P