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Notice

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Boston Stock Exchange, Incorporated, Relating to Its Floor Operations Fee Schedule

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Start Preamble May 8, 2003.

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 March 24, 2003, the Boston Stock Exchange, Incorporated (“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 prepared by the Exchange. On April 22, 2003, the Exchange filed Amendment No. 1 to the proposed rule change.[3] The Exchange has designated Start Printed Page 26362this proposal as one establishing or changing a due, fee or other charge imposed by the self-regulatory organization under section 19(b)(3)(A)(ii) of the Act [4] and Rule 19b-4(f)(2) thereunder,[5] which renders the proposed rule change effective upon filing with the Commission. 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 Exchange proposes to amend its Floor Operations Fee Schedule to include a provision for the pass-through of miscellaneous trading related fees. The text of the proposed rule change is below. Proposed new language is in italics.

* * * * *
Floor Operation Fees
(1) Occupancy/Technology:
Occupancy Fee$500.00 per post per month.
Specialist/Floor Trader Technology Fee$500.00 per Beacon terminal per month.
Floor Broker Technology Fee$100.00 per Beacon terminal per month.
Security Routing Fee$500.00 per month per Beacon user-ID that has stocks routed to it.
Floor Facility Fee$250.00 per person that regularly accesses the trading floor.
Electronic Trading Permit Fee$1,000.00 per trader trading from a remote location per month.
(2) Specialist Post Clearing and Cashiering:
Post Cashiering Fee$750.00 per specialist book for first 3 books per firm.
$100.00 per specialist book for any books in excess of 3 per firm.
Clearing Fee$.05 per trade.
(3) Listed Specialist Trade Processing Fees/Credits:
Pre-Opening TradesNo Charge.
Trades in CTA Securities ranked 1,001 and greaterNo Charge (BSE executions only).
Round lot$.50 per order.
Odd Lot Trades (includes CSI Issues)$.05 per order ($400 maximum per account).
Trading Account Trades$1.50 per order.
ETF Trade Credit$2.00 per trade (maximum annual credit capped at total amount paid in upfront annual registration fees).
Listed Securities
A. Maximum Total Round lot/Odd lot charges:
CTA Trade Rank:Monthly Transaction Fee Maximum
1-50$400.
51-100$300.
101-500$250.
501+$0*.
* Includes BSE executions only. For all other executions, the applicable trade rate will apply.
B. Credit:
Primary Specialist$.50 per trade (based on Competing Specialist trade volume).
(Total of the assessed fees for round lot/odd lot trades and trade credits will not be less than zero on a per issue basis)
(4) Other Charges:
ITS User Fee$.003 per share on net outbound specialist trades (charge for outgoing trades offset by cumulative credit for incoming trades); No charge for non-specialist firms.
Quotation ServicesMember assumes 100% of cost.
Specialist Margin Account FinancingCharged daily at current broker call rate.
Solely Listed Issue Credit$50.00 Credit per issue traded.
Miscellaneous Trading ChargesDirect pass through of all miscellaneous trading charges, such as Nasdaq fees, other market center access fees, ECN access fees, trading-related telecommunications charges, market data service charges, and other similar fees and charges.
Miscellaneous Administrative ChargesAt cost for phone, postage, courier service, fax usage, after hours BSE staff assistance and other applicable items.
Late Fees1.5% will be charged on outstanding balances as of the last calendar day of the month.
* * * * *

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 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's Floor Operation Fee schedule to include a Start Printed Page 26363provision for the pass-through of all miscellaneous fees to its members who incur such charges as a result of trading activity on the Exchange. The provision would allow for, among other things, as applicable, the pass-through of all Nasdaq fees, other market center access fees, ECN access fees, trading-related telecommunications charges, market data service charges, and other similar charges.

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with section 6 of the Act,[6] in general, and section 6(b)(4) of the Act,[7] in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among its members.

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. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action

The proposed rule change has become immediately effective pursuant to section 19(b)(3)(A)(ii) of the Act,[8] and subparagraph (f)(2) of Rule 19b-4 thereunder,[9] in that it establishes or changes a due, fee, or other charge imposed by the self-regulatory organization. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate the 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 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 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 No. SR-BSE-2003-03 and should be submitted by June 5, 2003.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[10]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble

Footnotes

3.  In Amendment No. 1, the Exchange amended the proposal (i) to clarify the language in the proposed rule change and (ii) to seek immediate effectiveness of the proposed rule change pursuant to section 19(b)(3)(A) of the Act and subparagraph (f)(2) of Rule 19b-4 thereunder. See letter dated April 22, 2003, from John Boese, Vice President, Legal and Compliance, Exchange, to Katherine England, Assistant Director, Division of Market Regulation, Commission. For purposes of calculating the 60-day period within which the Commission may summarily abrogate the proposed rule change under section 19(b)(3)(C) of the Act, the Commission considers that the period to commence on April 22, 2003, the date the Exchange filed Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).

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4.  15 U.S.C. 78s(b)(3)(A)(ii).

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8.  15 U.S.C. 78s(b)(3)(A)(ii).

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[FR Doc. 03-12147 Filed 5-14-03; 8:45 am]

BILLING CODE 8010-01-P