[Federal Register Volume 72, Number 149 (Friday, August 3, 2007)]
[Notices]
[Pages 43302-43303]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-15095]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-56167; File No. SR-BSE-2007-33]


Self-Regulatory Organizations; Boston Stock Exchange, Inc.; 
Notice of Filing and Order Granting Accelerated Approval of Proposed 
Rule Change as Modified by Amendment No. 1 To Extend the Linkage Fee 
Pilot Program

July 30, 2007.
    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 9, 2007, 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 substantially prepared by the Exchange. On July 25, 2007, the 
Exchange filed Amendment No. 1 to the proposed rule change. This order 
provides notice of the proposed rule change, as modified by Amendment 
No. 1, and approves the proposed rule change, as amended, on an 
accelerated basis.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The BSE proposes to amend the Fee Schedule of the Boston Options 
Exchange (``BOX''), the options trading facility of the BSE, to extend 
until July 31, 2008, the current pilot program applicable to the 
options intermarket linkage (``Linkage'') fees and to make some 
technical changes to the Fee Schedule. The text of the proposed rule 
change is available at the Exchange, the Commission's Public Reference 
Room, and http://www.bostonstock.com.

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 III 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 Exchange's fees for Principal (``P'') and Principal Acting as 
Agent (``P/A'') Orders \3\ executed on BOX currently operate under a 
pilot program scheduled to expire on July 31, 2007.\4\ The BSE proposes 
to extend the current pilot program for such Linkage fees through July 
31, 2008. Because all Linkage Orders received by BOX are for the 
account of a market maker on another exchange, Linkage fees that are 
applicable to P Orders and P/A Orders are the same as fees applicable 
to market makers on other exchanges that submit orders to BOX outside 
of Linkage. The side of a BOX trade opposite a P Order or P/A Order 
would be billed normally as any other BOX trade. Consistent with the 
Plan for the Purpose of Creating and Operating Linkage, no fees will be 
charged to a party sending a Satisfaction Order to BOX. Rather, a fee 
will be

[[Page 43303]]

charged to the BOX Options Participant that was responsible for the 
trade-through that caused the Satisfaction Order to be sent.
---------------------------------------------------------------------------

    \3\ Under Chapter XII, Section 1(j) of the BOX Rules, a 
``Linkage Order'' means an Immediate or Cancel order routed through 
Linkage. There are three types of Linkage Orders:
    (i) ``P/A Order,'' which is an order for the principal account 
of a Market Maker (or equivalent entity on another Participant 
Exchange that is authorized to represent Public Customer orders), 
reflecting the terms of a related unexecuted Public Customer order 
for which the Market Maker is acting as agent;
    (ii) ``P Order,'' which is an order for the principal account of 
a market maker (or equivalent entity on another Participant 
Exchange) and is not a P/A Order; and
    (iii) ``Satisfaction Order,'' which is an order sent through 
Linkage to notify a Participant Exchange of a Trade-Through and to 
seek satisfaction of the liability arising from that Trade-Through.
    \4\ See Securities Exchange Act Release No. 54225 (July 27, 
2006), 71 FR 44056 (August 3, 2006) (SR-BSE 2006-26).
---------------------------------------------------------------------------

    The BSE believes that extending the Linkage fee pilot program until 
July 31, 2008 will give the Exchange and the Commission additional time 
and opportunity to evaluate the appropriateness of Linkage fees.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with section 6(b) of the Act,\5\ in general, and furthers the 
objectives of section 6(b)(4) of the Act,\6\ in particular, in that the 
proposed rule change provides for the equitable allocation of 
reasonable dues, fees, and other charges among its members and other 
persons using its facilities.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78f(b).
    \6\ 15 U.S.C. 78f(b)(4)
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange does not believe that the proposed rule change will 
result in 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. 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-2007-33 on the subject line.

Paper Comments

     Send paper comments in triplicate to Nancy M. Morris, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.
    All submissions should refer to File Number SR-BSE-2007-33. 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, on official business days between the hours 
of 10 a.m. and 3 p.m. Copies of such 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-2007-33 and should be 
submitted on or before August 24, 2007.

IV. Commission's Findings and Order Granting Accelerated Approval of 
the Proposed Rule Change

    After careful consideration, the Commission finds that the proposed 
rule change is consistent with the requirements of the Act and the 
rules and regulations thereunder applicable to a national securities 
exchange,\7\ and, in particular, the requirements of section 6(b) of 
the Act \8\ and the rules and regulations thereunder. The Commission 
finds that the proposed rule change is consistent with section 6(b)(4) 
of the Act,\9\ which requires that the rules of the Exchange provide 
for the equitable allocation of reasonable dues, fees, and other 
charges among its members and other persons using its facilities. The 
Commission believes that the extension of the Linkage fee pilot until 
July 31, 2008 will give the Exchange and the Commission further 
opportunity to evaluate whether such fees are appropriate.
---------------------------------------------------------------------------

    \7\ In approving this rule change, the Commission notes that it 
has considered the proposal's impact on efficiency, competition, and 
capital formation. See 15 U.S.C. 78c(f).
    \8\ 15 U.S.C. 78f(b).
    \9\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

    The Commission also finds good cause for approving the proposed 
rule change prior to the 30th day after the date of publication of the 
notice of filing thereof in the Federal Register. The Commission 
believes that granting accelerated approval of the proposed rule change 
will preserve the Exchange's existing pilot program for Linkage fees 
without interruption as the Exchange and the Commission continue 
considering the appropriateness of Linkage fees.
    Therefore, the Commission finds good cause, consistent with section 
19(b)(2) of the Exchange Act,\10\ to approve the proposed rule change 
on an accelerated basis.
---------------------------------------------------------------------------

    \10\ 15 U.S.C. 78s(b)(2).
---------------------------------------------------------------------------

V. Conclusion

    It is therefore ordered, pursuant to section 19(b)(2) of the 
Act,\11\ that the proposed rule change (SR-BSE-2007-33), as modified by 
Amendment No. 1, be, and it hereby is, approved on an accelerated 
basis.
---------------------------------------------------------------------------

    \11\ 15 U.S.C. 78s(b)(2).
    \12\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
Nancy M. Morris,
Secretary.
 [FR Doc. E7-15095 Filed 8-2-07; 8:45 am]
BILLING CODE 8010-01-P