[Federal Register Volume 70, Number 149 (Thursday, August 4, 2005)]
[Notices]
[Pages 44957-44958]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4149]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52166; File No. SR-BSE-2005-34]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change To 
Extend a Pilot Program Relating to Boston Options Exchange Trading 
Rules Regarding Market Opening Procedures

July 29, 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 July 28, 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 Exchange. Pursuant to 
Section 19(b)(3)(A) of the Act,\3\ and Rule 19b-4(f)(6) thereunder,\4\ 
the Exchange has designated this proposal as ``non-controversial,'' 
which renders the proposed rule change effective immediately upon 
filing with the Commission.\5\ The Commission is publishing this notice 
to solicit comments on the proposed rule change 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).
    \4\ 17 CFR 240.19b-4(f)(6).
    \5\ 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 Exchange proposes to extend the pilot program (``Pilot 
Program'') for a provision of its Boston Options Exchange (``BOX'') 
trading rules regarding its market opening procedures for one year 
through August 6, 2006. The text of the proposed rule change is 
available on the Exchange's Web site (http://www.bostonstock.com), at 
the Exchange's Office of the Secretary, and at the Commission's Public 
Reference Room.

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 extend the Pilot 
Program for a section of the Rules of the Boston Options Exchange (the 
``BOX Rules'') relating to opening the market until August 6, 2006. 
Chapter V, Doing Business on BOX, Section 9, Opening the Market, 
establishes guidelines regarding market opening procedures (``Market 
Opening Rules''). On February 4, 2004, the Commission approved the 
guidelines, as set forth in the BOX Rules, on a pilot basis through 
August 6, 2004 \6\ and extended the Pilot Program for another year on 
August 6, 2004.\7\ The Exchange now seeks to extend the pilot for 
another year, until August 6, 2006.
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    \6\ See Securities Exchange Act Release No. 49192 (February 4, 
2004), 69 FR 7051 (February 12, 2004) (SR-BSE-2004-05).
    \7\ See Securities Exchange Act Release No. 50163 (August 6, 
2004) 69 FR 50230 (August 13, 2004) (SR-BSE-2004-28).
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    According to the BOX Market Opening Rules, for a period of at least 
one hour prior to the start of trading each day, the BOX Trading Host 
is in Pre-Opening Phase. During the Pre-Opening Phase, Options 
Participants are able to enter, modify and cancel orders and quotes, as 
well as Limit Orders from previous trading sessions which are still 
valid (e.g. ``Good Till Cancelled'' orders) that are automatically 
brought to the new Pre-Opening Phase and are available for modification 
and cancellation. A Theoretical Opening Price (``TOP''), which is the 
price which

[[Page 44958]]

would be the opening price if the Opening Match were to occur at that 
moment, is calculated and broadcast continuously to all BOX Options 
Participants during the Pre-Opening Phase; however, no orders are 
matched, nor trades executed until the primary market opens for each 
underlying security. At that point, an Opening Match is conducted, and 
any orders or quotes remaining on the BOX Book after the Opening Match 
are accessible for modification or cancellation during regular trading.
2. Statutory Basis
    The Exchange believes that the proposal is consistent with the 
requirements of Section 6(b) of the Act,\8\ in general, and Section 
6(b)(5),\9\ 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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    \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 Exchange 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 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

    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 Exchange has asked the Commission to waive the five-day pre-
filing notice requirement and the 30-day operative delay to allow the 
Pilot Program to continue to operate without interruption after it 
would have otherwise expired on August 6, 2005. 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 it would allow 
the Exchange to continue to provide standardized market open procedures 
for BOX that the Exchange can surveil, enforce, and continue to 
evaluate without interruption through August 6, 2006.\10\ For this 
reason, the Commission designates that the proposal become operative 
immediately.
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    \10\ For the purposes only of waiving the 30-day operative 
delay, the Commission has considered the proposed rule change'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.

 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-2005-34 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.
    All submissions should refer to File No. SR-BSE-2005-34. 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 the 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-2005-34 and should be submitted on or before August 25, 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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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4149 Filed 8-3-05; 8:45 am]
BILLING CODE 8010-01-P