[Federal Register Volume 70, Number 170 (Friday, September 2, 2005)]
[Notices]
[Page 52455]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4804]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52341; File No. SR-BSE-2005-20]


Self-Regulatory Organizations; Boston Stock Exchange; Order 
Granting Approval to Proposed Rule Change Relating to Trade Shredding

August 26, 2005.

I. Introduction

    On June 23, 2005, the Boston Stock Exchange (``BSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission'') pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934, as amended, (``Act'') \1\ and Rule 19b-4 
thereunder,\2\ the proposed rule change relating to trade shredding. 
The proposed rule change was published for notice and comment in the 
Federal Register on July 22, 2005.\3\ The Commission received no 
comments on the proposal. This order approves the proposed rule change.
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    \1\ 15 U.S.C. 78s(b)(l).
    \2\ 17 CFR 240. 19b-4.
    \3\ See Securities Exchange Act Release No. 52033 (July 14, 
2005), 70 FR 42396.
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II. Description of the Proposal

    The BSE proposed to add language to its existing BSE Rules to 
prohibit BSE members from splitting large orders into multiple smaller 
orders for any purpose other than best execution. The text of BSE Rules 
as the BSE is proposing to amend it is below. New text is in italics.
* * * * *

Chapter II

Dealings on the Exchange

    Sec. 4.
Units of Trading
    The unit of trading in bonds shall be $1000 in par value thereof.
    The unit of trading in stocks shall be 100 shares, except that the 
Exchange may fix a smaller number of shares in any particular instance.
    Bids or offers for less than the unit of trading shall specify the 
par value of the bonds or number of shares of stock covered by the bid 
or offer.
    A customer's order in the unit of trading, or multiples thereof, in 
any security traded on the Exchange, the primary market for which is on 
another Exchange, may not be split into odd-lots. A member may not 
split any order into multiple smaller orders for any purpose other than 
seeking the best execution of the entire order.
* * * * *

III. Discussion and Commission Findings

    The Commission has reviewed carefully the proposed rule change and 
finds that it is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange,\4\ particularly Section 6(b)(5) of the Act which, among other 
things, requires that the rules of a national securities exchange be 
designed to promote just and equitable principles of trade, to foster 
cooperation and coordination with persons engaged in regulating 
securities transactions, to remove impediments to perfect the mechanism 
of a free and open market and a national market system and, in general, 
to protect investors and the public interest.\5\ The Commission 
believes that the proposed rule change should help eliminate the 
distortive practice of trade shredding, and, therefore, promote just 
and equitable principles of trade.
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    \4\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \5\ 15 U.S.C. 78f(b)(5).
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IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\6\ that the proposed rule change (File No. SR-BSE-2005-20), be and 
hereby is, approved.
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    \6\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
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    \7\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4804 Filed 9-1-05; 8:45 am]
BILLING CODE 8010-01-P