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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Boston Stock Exchange, Inc. To Amend Its Transaction Fee Schedule and Floor Operations Fee Schedule

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Start Preamble October 18, 2000.

Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) [1] and Rule 19b-4 [2] thereunder, notice hereby is given that on September 28, 2000, 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, II, and III below, which Items have been substantially prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change 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 Transaction Fee Schedule to increase the amount of monthly transaction-related revenue the BSE must generate before it shares excess revenue with eligible members. Additionally, the BSE proposes to amend its Floor Operations Fee Schedule to include a per-trade credit for executions in Exchange Traded Funds (“ETFs”) for which registration fees are required. The text of the proposed rule change is available at the principal office of the BSE and at the Commission.

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 regarding the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The BSE 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 BSE's Revenue Sharing Program. Currently, the Exchange's Transaction Fee Schedule states that the minimum amount of monthly transaction-related revenue the BSE must generate before it shares excess revenue with member firms in $1.4 million. The BSE proposes to raise this threshold to $1.5 million in order to help meet the budgeted costs of operating the Exchange in the upcoming fiscal year.

In addition, the proposed rule change would amend the Exchange's Floor Operations Fee Schedule to include a $2 per-trade credit for each trade in certain ETFs that are executed on the BSE and routed to a specialist firm on the Exchange. Member firms must pay a registration fee for trading certain ETFs on the Exchange. Only those ETFs for which member firms must pay a registration fee would be subject to the $2 per-trade credit. The maximum annual credit that a specialist could receive per ETF would be capped at the amount the specialist paid for that ETF's annual registration fee.

2. Basis

The BSE believes that the proposed rule change is permissible under section 6(b)(5) of the Act [3] in that it is designed to promote just and equitable principles of trade; to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities; to remove impediments to and perfect the mechanism of a free and open market and a national market system; and, in general, to protect investors and the public interest. The BSE has stated that the proposed rule change is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers.[4]

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

The Exchange does not believe that the proposed rule change would 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 Change and Timing for Commission Action

The foregoing rule change establishes or changes a due, fee, or other charge imposed by the Exchange and therefore has become effective pursuant to Section 19(B)(3)(A)(ii) of the Act [5] and subparagraph (f)(2) of Rule 19b-4 [6] thereunder. 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 purpose 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. 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 at 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 No. SR-BSE-00-14 and should be submitted by November 16, 2000.

Start Signature

For the Commission, by the Division of the Market Regulation, pursuant to delegated authority.[7]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

4.  The Exchange also believes that the proposed rule change is consistent with section 6(b)(4) of the Act, 15 U.S.C. 78f(b)(4), in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among its members. Telephone conversation between Kathy Marshall, Vice President, and John Boese, Assistant Vice President, BSE, and Michael Gaw, Attorney-Adviser, Division of Market Regulation, Commission, on October 18, 2000.

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5.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 00-27480 Filed 10-25-00; 8:45 am]

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