[Federal Register Volume 69, Number 201 (Tuesday, October 19, 2004)]
[Notices]
[Pages 61530-61532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-2714]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50520; File No. SR-BSE-2004-49]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the Boston Stock Exchange, 
Inc. Relating to an Extension of the Specialist Performance Evaluation 
Program Pilot

October 13, 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 October 6, 2004, the Boston Stock Exchange, Inc. (``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. The Exchange filed the proposal pursuant to Section 
19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) 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 change.
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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).
    \4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The BSE proposes to extend its Specialist Performance Evaluation 
Program until December 31, 2004. Below is the text of the proposed rule 
change. Proposed new language is italicized; proposed deletions are in 
[brackets].
* * * * *

[[Page 61531]]

Chapter XV--Specialists

Specialist Performance Evaluation Program
SEC. 17
    (a)--(e) No change
    (f) This program will expire on [September 30] December 31, 2004, 
unless further action is taken by the Exchange.
* * * * *

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 BSE 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 seeks to extend its Specialist Performance Evaluation 
Program (``SPEP'') pilot, until December 31, 2004.
    The Exchange states that, pursuant to the SPEP pilot program, it 
regularly evaluates the performance of its specialists by using 
objective measures, such as turnaround time, price improvement, depth, 
and added depth. Generally, any specialist who receives a deficient 
score in one or more measures may be required to attend a meeting with 
the Performance Improvement Action Committee, or the Market Performance 
Committee.
    While the Exchange believes that the SPEP program has been a very 
successful and effective tool for measuring specialist performance, it 
also believes that modifications are necessary as a result of recent 
changes in the industry, particularly decimalization. The Exchange has 
filed a proposal with the Commission to amend its rules with respect to 
the SPEP program.\5\ Accordingly, the Exchange is seeking to extend the 
pilot period of this program while its proposal to amend the SPEP 
program is pending with the Commission.
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    \5\ See Securities Exchange Act Release No. 50287 (August 27, 
2004), 69 FR 53966 (September 3, 2004) (SR-BSE-2004-25).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with Section 6(b) of the Act \6\ in general, and furthers the 
objectives of Section 6(b)(5) \7\ 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 is not designed to permit unfair 
discrimination between customers, brokers, or dealers, or to regulate 
by virtue of any authority matters not related to the administration of 
the Exchange.
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    \6\ 15 U.S.C. 78f(b).
    \7\ 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.

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 proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act \8\ and Rule 19b-4(f)(6) thereunder \9\ 
because the proposal: (i) Does not significantly affect the protection 
of investors or the public interest; (ii) does not impose any 
significant burden on competition; and (iii) does not become operative 
prior to 30 days after the date of filing or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest; provided that the Exchange has given the 
Commission notice of its intent to file the proposed rule change, along 
with a brief description and text of the proposed rule change, at least 
five business days prior to the date of filing of the proposed rule 
change, or such shorter time as designated by 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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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(6).
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    The BSE has requested that the Commission waive the five-day pre-
filing notice and the 30-day operative delay.\10\ The Commission 
believes that waiving the 30-day operative delay is consistent with the 
protection of investors and the public interest because it will allow 
the pilot program to continue with minimal interruption and will permit 
the Commission to continue to evaluate the proposed changes to the 
pilot program.\11\ In addition, the Commission has determined to waive 
the five-day pre-filing notice. For these reasons, the Commission 
designates the proposal to be effective and operative upon filing with 
the Commission.\12\
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    \10\ Exhibit 1 of SR-BSE-2004-49 contained certain discrepancies 
with Item 7 of SR-BSE-2004-49 with regard to the filing's date of 
effectiveness, which discrepancies have been conformed in this 
notice by Commission staff. Telephone conversation between John 
Boese, Vice President, Chief Regulatory Officer, BSE, and David Liu, 
Attorney, Division of Market Regulation, Commission, on October 8, 
2004.
    \11\ See note 5 supra.
    \12\ For purposes only of accelerating the operative date of 
this proposal, the Commission has 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 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-2004-49 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-2004-49. 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

[[Page 61532]]

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 Section, 450 Fifth Street, NW., Washington, DC 20549. Copies 
of such 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-2004-49 and should be submitted on or before 
November 9, 2004.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E4-2714 Filed 10-18-04; 8:45 am]
BILLING CODE 8010-01-P