[Federal Register Volume 69, Number 242 (Friday, December 17, 2004)]
[Notices]
[Pages 75572-75573]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3701]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-50834; File No. SR-BSE-2004-55]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change and Amendment No. 1 Thereto by 
the Boston Stock Exchange, Inc. Relating to Trading Hours for Options 
Contracts Overlying the Nasdaq 100 Index Trading Stock[reg] on the 
Boston Options Exchange

December 10, 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 December 1, 2004, 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 and 
II below, which Items have been prepared by the Exchange. On December 
3, 2004, the Exchange filed Amendment No. 1 to the proposed rule 
change.\3\ The Exchange filed the proposal, as amended, as a ``non-
controversial'' proposed rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \4\ and Rule 19b-4(f)(6) thereunder.\5\ 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    \3\ Amendment No. 1 superseded and replaced the proposed rule 
change in its entirety.
    \4\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \5\ 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 Exchange proposes to amend a section of the Boston Options 
Exchange (``BOX'') rules regarding the hours during which options 
transactions may be made on BOX. The text of the proposed rule change, 
as amended, is set forth below.
    Proposed new language is in italics.
* * * * *
CHAPTER V. DOING BUSINESS ON BOX
Sec. 1-2 No Change
Sec. 3 Days and Hours of Business
    (a) No change.
    (b) Except for unusual conditions as may be determined by the 
Board, hours during which transactions in options on individual stocks 
may be made on BOX shall correspond to the normal business days and 
hours for business set forth in the rules of the primary market trading 
the securities underlying BOX options; provided, however, that 
transactions may be effected in an options class on BOX until two (2) 
minutes after the primary market on which the underlying security 
trades closes for trading. (See BSE Rules Chapter I-B, ``Business 
Hours'', Section 1, ``Primary Session''). Notwithstanding the 
foregoing, transactions may be effected in options contracts overlying 
the Nasdaq 100 Index Trading Stock[reg] on BOX until 4:15 p.m.
    (c) 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 statutory 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 proposes to permit the hours during which options 
contracts overlying the Nasdaq 100 Index Trading Stock[reg] (the 
``Index Trading Stock'') may be made on BOX to remain unchanged after 
the Index Trading Stock lists on the Nasdaq Stock Market (``Nasdaq'') 
beginning December 1, 2004. Prior to December 1, 2004, the Index 
Trading Stock was listed on the American Stock Exchange and trading in 
the options contracts overlying the Index Trading Stock traded on BOX 
until 4:15 p.m. Eastern Time.
    Currently, Chapter V, Section 3(b) of BOX's rules provides that 
hours during which transactions in options on individual stocks may be 
made on BOX shall correspond to the normal business days and hours for 
business set forth in the rules of the primary market trading the 
securities underlying BOX options; provided, however, that transactions 
may be effected in an options class on BOX until two (2) minutes after 
the primary market on which the underlying security trades closes for 
trading. Because Nasdaq will trade the Index Trading Stock until 4 p.m. 
Eastern Time, under its current rules, BOX can only trade in the 
options contracts overlying the Index Trading Stock until 4:02 p.m. 
Eastern Time.
    BOX Market Makers have requested that BOX consider maintaining the 
status quo, and allow trading in options contracts overlying the Index 
Trading Stock to continue until 4:15 p.m. Eastern Time. The rules of 
other options exchanges currently provide for trading in these options 
contracts to continue until this time.\6\ BOX believes the investment 
community would benefit from maintaining continuity and consistency in 
the marketplace. As a result, the Exchange proposes to amend Chapter V, 
Section 3(b) of BOX's rules to allow trading in options contracts 
overlying the Index Trading Stock to continue until 4:15 p.m. Eastern 
Time.
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    \6\ See Rule 7.1, commentary .02 of the rules of the Pacific 
Exchange.

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[[Page 75573]]

2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\7\ in general, and Section 
6(b)(5) of the Act,\8\ in particular, in that it is designed to prevent 
fraudulent and manipulative acts and practices, 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, 
in general, to protect investors and the public interest.
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    \7\ 15 U.S.C. 78f(b).
    \8\ 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 Exchange has designated the proposed rule change, as amended, 
as a ``non-controversial'' rule change pursuant to Section 
19(b)(3)(A)(iii) of the Act \9\ and subparagraph (f)(6) of Rule 19b-4 
thereunder.\10\ The Exchange represents that the foregoing rule change: 
(1) Does not significantly affect the protection of investors or the 
public interest; (2) does not impose any significant burden on 
competition; and (3) by its terms, does not become operative for 30 
days after the date of this filing, or such shorter time as the 
Commission may designate if consistent with the protection of investors 
and the public interest. The Exchange has requested that the Commission 
waive the five-day pre-filing notice requirement and the 30-day 
operative delay period for ``non-controversial'' proposals and make the 
proposed rule change, as amended, effective and operative upon filing.
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    \9\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \10\ 17 CFR 240.19b-4(f)(6).
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    The Commission has determined to waive the five-day pre-filing 
notice requirement and the 30-day operative delay period.\11\ The 
Commission notes that accelerating the operative date will allow the 
trading hours for options contracts overlying the Index Trading Stock 
to remain unchanged and provide continuity to the marketplace. 
Therefore, the foregoing rule change has become immediately effective 
and operative upon filing pursuant to Section 19(b)(3)(A)(iii) of the 
Act \12\ and Rule 19b-4(f)(6) thereunder.\13\
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    \11\ 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).
    \12\ 15 U.S.C. 78s(b)(3)(A)(iii).
    \13\ 17 CFR 240.19b-4(f)(6).
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    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.\14\
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    \14\ 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 period 
to commence on December 3, 2004, the date the Exchange filed 
Amendment No. 1 to the proposed rule change. See 15 U.S.C. 
78s(b)(3)(C).
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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-2004-55 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-2004-55. 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, 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 
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-
2004-55 and should be submitted on or before January 7, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E4-3701 Filed 12-16-04; 8:45 am]
BILLING CODE 8010-01-P