[Federal Register Volume 70, Number 14 (Monday, January 24, 2005)]
[Notices]
[Pages 3403-3404]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-212]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 51031; File No. SR-BSE-2004-46]


Self-Regulatory Organizations; Boston Stock Exchange; Notice of 
Filing and Immediate Effectiveness of Proposed Rule Change Relating to 
Its Instant Liquidity Access Rules

January 12, 2005.
    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 20, 2004, the Boston Stock Exchange (``Exchange'') filed 
with the Securities and Exchange Commission (``Commission'') the 
proposed rule as described in Items I and II below, which Items have 
been prepared by the Exchange. The proposed rule change has been filed 
by the Exchange as a non-controversial filing pursuant to Rule 19b-
4(f)(6) under the Act.\3\ 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\ 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 its rules regarding Instant 
Liquidity Access.

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 amend a section of 
the Rules of the Board of Governors of the Boston Stock Exchange (``BSE 
Rules'') relating to Instant Liquidity Access (``ILA''). In Chapter 
XXXIII, Section 8, the Exchange sets forth rules related to the 
facilitation of orders through ILA. The Exchange is proposing that ILA 
orders for any account in which the same person is directly or 
indirectly interested may be entered without any time delay between the 
entry of orders in the book. Presently, there is a thirty-second 
restriction between the entry of orders for the same account.
    When the ILA rules were originally drafted, the intention behind 
the thirty-second interval was to provide a measure of protection for 
Exchange specialists by preventing orders from being entered in a rapid 
fire manner. The Exchange has now had several months of experience with 
ILA, and both Exchange customers and specialists have requested that 
the thirty-second restriction be removed, so that ILA can be utilized 
for a larger percentage of orders. The concern about

[[Page 3404]]

rapid fire orders has been addressed through systemic enhancements 
which, according to ILA rules, automatically cancel an ILA order if it 
can not be immediately executed. Accordingly, since the concerns behind 
the thirty-second restriction never materialized, and because systemic 
enhancements have obviated the need for such a restriction, the 
Exchange is seeking to abolish the limitation. Moreover, the Exchange 
believes that removing the thirty-second restriction will encourage 
more customers to utilize ILA, and thereby have their orders 
immediately executed, without the intervention of a specialist.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\4\ in general, and Section 
6(b)(5) \5\ 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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    \4\ 15 U.S.C. 78f(b).
    \5\ 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 one that: 
(1) Does not significantly affect the protection of investors or the 
public interest; (2) does not impose any significant burden on 
competition; and (3) does not become operative for 30 days from the 
date of filing, or such shorter time as the Commission may designate if 
consistent with the protection of investors and the public interest 
pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6) \7\ 
thereunder.
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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under Rule 19b-4(f)(6) \8\ normally 
does not become operative prior to thirty days after the date of 
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\9\ the Commission 
may designate a shorter time if such action is consistent with the 
protection of investors and the public interest. The Exchange seeks to 
have the proposed rule change become operative immediately so that it 
can eliminate a restriction in its rules that is no longer necessary.
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    \8\ Id.
    \9\ 17 CFR 240.19b-4(f)(6)(iii).
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    The Commission, consistent with the protection of investors and the 
public interest, has determined to make the proposed rule change 
effective as of the date of this order.\10\ The Commission believes 
that the proposal could enhance the use of automatic executions on the 
Exchange and may result in more timely and orderly executions of 
orders.
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    \10\ For purposes of only accelerating the operative date of 
this proposal, the Commission has considered the rule's impact on 
efficiency, competition and capital formation. 15 U.S.C. 78c(f).
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    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.

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 E-mail to [email protected]. Please include File 
Number SR-BSE-2004-46 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-2004-46. 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 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-2004-46 and should be submitted on or before 
February 14, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\11\
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    \11\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-212 Filed 1-21-05; 8:45 am]
BILLING CODE 8010-01-P