[Federal Register Volume 71, Number 40 (Wednesday, March 1, 2006)]
[Notices]
[Pages 10573-10574]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-2817]



[[Page 10573]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-53347; File No. SR-BSE-2006-07]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Its Boston Options Exchange Trading Rules Regarding the 
Extension of a Pilot Program That Increases the Standard Position and 
Exercise Limits for Certain Options Traded

February 22, 2006.
    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 February 15, 2006, 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. The Exchange has 
filed the proposal as a ``non-controversial'' rule change pursuant to 
section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\ 
which renders it effective upon filing with the Commission. 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).
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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 the rules of the Boston Options Exchange 
(``BOX''), an options trading facility of the BSE, to extend its 
current pilot program to increase the standard position and exercise 
limits for equity option contracts and options on the Nasdaq-100 Index 
Tracking Stock (``QQQQ'') (``Pilot Program''). The text of the proposed 
rule change is available on the BSE's Web site (http://www.bostonstock.com), at the BSE's principal office, 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 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 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 Pilot Program provides for an increase to the standard position 
and exercise limits for equity option contracts and for options on 
QQQQs for a six-month period.\5\ Specifically, the Pilot Program 
increased the applicable position and exercise limits for equity 
options and options on the QQQQ to the following levels:
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    \5\ The Pilot Program, which commenced on March 3, 2005, is set 
to expire on March 3, 2006. See Securities Exchange Act Release Nos. 
51317 (March 3, 2005), 70 FR 12254 (March 11, 2005) (notice of 
filing and immediate effectiveness of File No. SR-BSE-2005-10) 
(``Pilot Program Notice''). See also Securities Exchange Act Release 
No. 52264 (August 15, 2005), 70 FR 48992 (August 22, 2005) (notice 
of filing and immediate effectiveness of File No. SR-BSE-2005-37, 
which extended the Pilot Program).
    \6\ Except when the Pilot Program is in effect.

------------------------------------------------------------------------
   Current equity option contract        Pilot program equity option
             limit \6\                          contract limit
------------------------------------------------------------------------
                         13,500                               25,000
                         22,500                               50,000
                         31,500                               75,000
                        160,000                              200,000
                         75,000                              250,000
------------------------------------------------------------------------
                               CurrenPilot Program QQQQ option contract
                                                               limit
------------------------------------------------------------------------
                        300,000                              900,000
------------------------------------------------------------------------

    The Exchange believes that extending the Pilot Program for six 
months is warranted due to positive feedback from members and for the 
reasons cited in the original rule filing that proposed the adoption of 
the Pilot Program.\7\ In addition, BOX has not encountered any problems 
or difficulties relating to the Pilot Program since its inception. For 
these reasons, the BSE requests that the Commission extend the Pilot 
Program for an additional period of approximately six months, through 
and including September 1, 2006.
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    \7\ See Pilot Program Notice, supra note 5.
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2. Statutory Basis
    The Exchange believes that its proposal is consistent with section 
6(b) of the Act,\8\ in general, and furthers the objective 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 protect investors and the 
public interest.
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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.

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 forgoing rule change does not: (1) Significantly affect 
the protection of investors or the public interest; (2) impose any 
significant burden on competition; and (3) become operative for 30 days 
after the date of this filing, or such shorter time as the

[[Page 10574]]

Commission may designate, it has become effective pursuant to section 
19(b)(3)(A) of the Act \10\ and Rule 19b-4(f)(6) thereunder.\11\
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    \10\ 15 U.S.C. 78s(b)(3)(A).
    \11\ 17 CFR 240.19b-4(f)(6).
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    A proposed rule change filed under 19b-4(f)(6) normally may not 
become operative prior to 30 days after the date of filing.\12\ 
However, Rule 19b-4(f)(6)(iii) \13\ permits the Commission to designate 
a shorter time if such action is consistent with the protection of 
investors and the public interest. The Exchange provided the Commission 
with written notice of its intent to file this proposed rule change at 
least five business days prior to the date of filing the proposed rule 
change. In addition, the Exchange has requested that the Commission 
waive the 30-day pre-operative delay. The Commission believes that 
waiving the 30-day pre-operative delay is consistent with the 
protection of investors and in the public interest because it will 
allow the Pilot Program to continue uninterrupted.\14\
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    \12\ 17 CFR 240.19b-4(f)(6)(iii).
    \13\ Id.
    \14\ For the purposes only of waiving the pre-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 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 No. SR-BSE-2006-07 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, Station Place, 100 F 
Street, NE., Washington, DC 20549-1090.

All submissions should refer to File No. SR-BSE-2006-07. 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, 100 F Street, NE., 
Washington, DC 20549. 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-2006-07 and should be 
submitted on or before March 22, 2006.

    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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Nancy M. Morris,
Secretary.
 [FR Doc. E6-2817 Filed 2-28-06; 8:45 am]
BILLING CODE 8010-01-P