[Federal Register Volume 70, Number 134 (Thursday, July 14, 2005)]
[Notices]
[Pages 40757-40759]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-3729]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51991; File No. SR-BSE-2005-23]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
and Amendment No. 1 Thereto To Add New Account Identification Codes

July 7, 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 June 23, 2005, 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 BSE. On July 7, 2005, 
the BSE filed Amendment No. 1 to the proposed rule change.\3\ The BSE 
filed the proposal pursuant to Section 19(b)(3)(A) of the Act,\4\ and 
Rule 19b-4(f)(6) thereunder,\5\ which renders the proposal effective 
upon filing with the Commission.\6\ 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\ In Amendment No. 1, the Exchange made non-substantive 
changes to re-format certain account identification code headings 
and clarify references made to rules of the New York Stock Exchange, 
Inc. (``NYSE'') and the American Stock Exchange LLC (``AMEX''). The 
effective date of the original proposed rule change is June 23, 
2005, and the effective date of Amendment No. 1 is July 7, 2005. 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 such period 
to commence on July 7, 2005, the date on which the Exchange filed 
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
    \4\ 15 U.S.C. 78s(b)(3)(A).
    \5\ 17 CFR 240.19b-4(f)(6).
    \6\ The BSE has asked the Commission to waive the five-day pre-
filing notice requirement and the 30-day operative delay. See Rule 
19b-4(f)(6)(iii), 17 CFR 240.19b-4(f)(6)(iii). See also discussion 
infra Section III.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The BSE proposes to amend its rules regarding Account 
Identification Codes.\7\ The text of the proposed rule change is 
available on the BSE's Internet Web site (http://www.bostonstock.com), 
at the BSE's Office of the Secretary, and

[[Page 40758]]

at the Commission's Public Reference Room.
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    \7\ See infra Section II.A.1 for a complete description of the 
terms and purpose of the proposed rule change.
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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 BSE 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 is seeking to add several Account Identification Codes 
to its existing rules regarding recordkeeping requirements. In Chapter 
II, ``Dealings on the Exchange'', Section 15, ``Record of Orders from 
Offices to Floor'', the BSE requires that each order be marked with one 
of several Account Identification Codes. The codes that are currently 
available are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                Program trade
                                                              Program trade       non-index         All other
                                                            index  arbitrage      arbitrage          orders
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Member/member organization:
    --Proprietary.........................................                D                  C                P
    --As agent for other member...........................                M                 N                 W
Customer:
    --Individual (80A)....................................                J                 K                 I
    --Other agency........................................                U                 Y                 A
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    Accompanying the existing Account Identification Codes are 
definitions, as follows:
Definitions
    Member/member organization, proprietary: A member/member 
organization trading for its own account.
    Member/member organization, as agent for other member: A member/
member organization trading as agent for the account of another member/
member organization.
    Program Trade, Index Arbitrage: The purchase or sale of ``baskets'' 
or groups of stocks in conjunction with the intended purchase or sale 
of one or more cash-settled options or futures contracts in an attempt 
to profit by the price difference, as defined in NYSE Rule 80A.
    Program Trade, Non-Index Arbitrage: A trading strategy involving 
the related purchase or sale of a group of 15 or more stocks having a 
total market value of $1 million or more, as defined in NYSE Rule 80A.
    Individual (80A): An account for an individual as defined by NYSE 
Rule 80A.
Other Agency: Any other non-member or non-member organization.

    The BSE proposes to add new Account Identification Codes and 
definitions to its rules in order to provide its members and customers 
with the ability to more accurately reflect their specific type of 
trading in the records of their orders. Similar identification codes 
and accompanying definitions are presently utilized by other exchanges, 
such as the NYSE, as required by NYSE Rule 123 ``Record of Orders,'' 
and the AMEX, as set forth in AMEX Rule 719, ``Comparison of Exchange 
Transactions.'' The account types and definitions that the BSE seeks to 
add to its existing rules are similar to those set forth by the NYSE 
and AMEX. The BSE proposes to add the following information to its 
account indicator requirements:

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                                                                                                    Competing
                                                            Competing market    Short exempt     market, maker,
                                                                  maker                           short exempt
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Member/member organization:
    --Proprietary.........................................                O                 E                 L
    --As agent for other member...........................                T                 F                 X
Customer:
    --Individual (80A)....................................               --                 H                --
    --Other agency........................................                R                 B                 Z
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    Additional definitions would also be added to reflect the new 
codes:

Competing Market Maker: Any person acting as a market maker, as defined 
in Section 3(a)(38) of the Securities Exchange Act of 1934, in an 
exchange-listed security. A person acting solely in the capacity of a 
block positioner would not be considered a competing market maker.
Proprietary, Competing Market Maker: A member or member organization 
trading for its own competing market maker account.
As Agent for Other Member, Competing Market Maker: A member or member 
organization trading as agent for another member's competing market 
maker account.
Other Agency, Competing Market Maker: A member or member organization 
trading as agent for the proprietary account for a non-member competing 
market maker.
Short Exempt: Short sale transactions that are exempt from the 
provisions of SEC Rule 10a-1.

    In proposing the above changes, the BSE seeks to be consistent with 
the similar requirements of other exchanges regarding account 
identification codes. Moreover, the addition of the various codes will 
provide Exchange members the ability to more appropriately identify the 
types of trading activity in which they engage, and therefore, to

[[Page 40759]]

maintain more accurate and detailed records of their trading activity.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of Section 6(b) of the Act,\8\ in general, and 
furthers the objectives of Section 6(b)(5) of the Act,\9\ in 
particular, in that it is designed to promote just and equitable 
principles of trade and 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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    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The BSE does not believe that the proposed rule change 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

    The BSE 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

    Because the foregoing proposed 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 proposed rule change has become effective pursuant to 
Section 19(b)(3)(A) of the Act and Rule 19b-4(f)(6) thereunder.
    A proposed rule change filed under Rule 19b-4(f)(6) normally does 
not become operative for 30 days after the date of filing. However, 
Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter 
time if such action is consistent with the protection of investors and 
the public interest. In addition, Rule 19b-4(f)(6)(iii) requires a 
self-regulatory organization to provide the Commission with written 
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.
    The BSE has asked the Commission to waive the five-day pre-filing 
notice requirement and the 30-day operative delay to allow the Exchange 
to immediately apply the new Account Identification Codes. The 
Commission waives the five-day pre-filing notice requirement. In 
addition, the Commission believes that waiving the 30-day operative 
delay is consistent with the protection of investors and the public 
interest because the proposed rule change will provide the Exchange's 
members and customers with the ability to more appropriately identify 
the types of trading activity in which they engage and more accurately 
reflect their specific type of trading in the records of their 
orders.\10\
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    \10\ For purposes only of waiving the 30-day operative delay, 
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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    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.\11\
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    \11\ See supra note 3.
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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 No. SR-BSE-2005-23 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-9303.
    All submissions should refer to File No. SR-BSE-2005-23. 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 will also 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 No. SR-BSE-2005-23 and 
should be submitted on or before August 4, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-3729 Filed 7-13-05; 8:45 am]
BILLING CODE 8010-01-P