Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change and Amendment No. 1 by the Boston Stock Exchange, Inc. To Amend Its Fee Schedule
Table of Contents
- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
- II. Self-Regulatory Organization's Statement of the Purpose of, andStatutory Basis for, the Proposed Rule Change
- A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change
- 1. Purpose
- 2. Statutory Basis
- B. Self-Regulatory Organization's Statement on Burden on Competition
- C. Self-Regulatory Organization's Statement on Comments on the ProposedRule Change Received From Members, Participants, or Others
- III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action
- IV. Solicitation of Comments
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934(“Act”),  and Rule 19b-4 thereunder,  notice is hereby given that on August 8, 2002, the Boston Stock Exchange, Incorporated (“BSE” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. On August 20, 2002, the BSE amended the proposal.  The Exchange has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the BSE under section 19(b)(3)(A)(ii) of the Act,  which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change, as amended, from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change ↑
The BSE proposes to amend its Floor Operations Fees Schedule. The text of the proposed rule change is available at the BSE and at the Commission.
II. Self-Regulatory Organization's Statement of the Purpose of, andStatutory 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 amend the Exchange'sFloor Operation Fees schedule to ensure that the Exchange recovers the fixed costs of providing services to floor members. Generally, the fee changes reflect a pass-through of direct costs in certain expense areas which are not fully paid for by floor members today. These fees that the BSE is amending in this proposed rule change apply to members only, and the changes are applied on a non-discriminatory basis.
The proposed changes to the Floor Operation Fees schedule are (1) increasing the Specialist/Floor Trader Technology Fee (per BEACON terminal per month) from $250 to $500; (2) implementing a Designated ExaminingAuthority (“DEA”) fee of $400 per month per firm where the Exchange is not the primary examining authority, and $600 per month per firm where the Exchange is the primary examining authority; (3) implementing a $100 SRO Fee (per specialist account); (4) implementing a $250 Floor Facility Fee(per month per person who regularly accesses the trading floor); (5) increasing the Specialist Post Clearing and Cashiering fee from $500 to $750 (per account for the first 3 accounts a specialist firm has and $100 for any accounts a firm may have in excess of 3); (6) decreasing the RoundLot fee (per order) from $.75 to $.50 and; (7) implementing a Clearing Fee(per order) of $.05.
The Exchange is seeking these fee increases, and direct cost reimbursements to, in part, fund technology initiatives. However, the Exchange seeks to charge its members in an equitable and fair manner for its products and services while funding these initiatives, and at the same timecontinue to provide a high quality marketplace at competitive prices. The Exchange's decreasing of its Round Lot Fee, as well as its relatively minor adjustments to other fees, is reflective of this objective.
2. Statutory Basis ↑
The Exchange believes the proposed rule change is consistent with section 6(b) of the Act,  in general, and furthers the objectives of section 6(b)(4) of the Act,  in particular, in that the proposed rule change provides for the equitable allocation of reasonable dues, fees, and other charges among the BSE's members.
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 ProposedRule 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 ↑
The proposed rule change has become effective pursuant to section 19(b)(3)(A)(ii) of the Act  and subparagraph (f)(2) of Rule 19b-4 thereunder,  because it involves a due, fee, or other charge. 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 proposal is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. 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 Exchange. All submissions should refer to file number SR-BSE-2002-12, and should be submitted by October 8, 2002.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority. Margaret H. McFarland, Deputy Secretary.
3. See August 19, 2002 letter from John A. Boese, Assistant Vice President, Legal and Regulatory, BSE, to Nancy Sanow, Assistant Director, Division of Market Regulation, SEC, and attachments (“Amendment No. 1”). Amendment No. 1 completely replaces and supersedes the original filing. For purposes of calculating the 60-day abrogation period, the Commission considers the period to have commenced on August 20, 2002, the date the BSE filed Amendment No. 1.