This site displays a prototype of a “Web 2.0” version of the daily Federal Register. It is not an official legal edition of the Federal Register, and does not replace the official print version or the official electronic version on GPO’s govinfo.gov.
The documents posted on this site are XML renditions of published Federal Register documents. Each document posted on the site includes a link to the corresponding official PDF file on govinfo.gov. This prototype edition of the daily Federal Register on FederalRegister.gov will remain an unofficial informational resource until the Administrative Committee of the Federal Register (ACFR) issues a regulation granting it official legal status. For complete information about, and access to, our official publications and services, go to About the Federal Register on NARA's archives.gov.
The OFR/GPO partnership is committed to presenting accurate and reliable regulatory information on FederalRegister.gov with the objective of establishing the XML-based Federal Register as an ACFR-sanctioned publication in the future. While every effort has been made to ensure that the material on FederalRegister.gov is accurately displayed, consistent with the official SGML-based PDF version on govinfo.gov, those relying on it for legal research should verify their results against an official edition of the Federal Register. Until the ACFR grants it official status, the XML rendition of the daily Federal Register on FederalRegister.gov does not provide legal notice to the public or judicial notice to the courts.
On December 8, 2006, the Boston Stock Exchange, Inc. (“BSE” or “Exchange”) filed with the Securities and Exchange Commission (“Commission”) a proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),[1] and Rule 19b-4 thereunder,[2] to amend the rules of the Boston Options Exchange (“BOX”) relating to the treatment of Limit Orders that are submitted to the BOX during a Price Improvement Period (“PIP”). On January 4, 2007, the BSE filed Amendment No. 1 to the proposal. The proposed rule change, as amended, was published for comment in the Federal Register on January 16, 2007.[3] The Commission received no comments on the proposal. This order approves the proposed rule change as modified by Amendment No. 1.
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 [4] and, in particular, the requirements of Section 6(b)(5) of the Act.[5] Specifically, the Commission believes that the proposed rule change is consistent with the Act because it makes explicit how unrelated Limit Orders [6] in the same series as a PIP Order, submitted to the BOX during the PIP,[7] are treated, and specifies the circumstances under which Improvement Orders are not accepted by the BOX Trading Host.[8] The Commission believes that these rule amendments are reasonable and consistent with the Act, and should help clarify for investors and market participants how their orders are executed in various situations.[9]
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,[10] that the proposed rule change (SR-BSE-2006-03) as modified by Amendment No. 1, be, and hereby is approved.
March 7, 2007.For the Commission, by the Division of Market Regulation, pursuant to delegated authority.[11]
Florence E. Harmon,
Deputy Secretary.
3. See Securities Exchange Act Release No. 55050 (January 5, 2007), 72 FR 1786 (SR-BSE-2006-03) (“Notice”).
Back to Citation4. In approving this proposed rule change, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. 15 U.S.C. 78c(f).
Back to Citation6. An “unrelated order,” generally, is a non-Improvement Order entered into the BOX market while a PIP is in progress. See paragraph (a) of Section 18 of Chapter V of the BOX rules. An “Improvement Order,” generally, is an order submitted to a PIP to compete for a “PIP Order” (a customer order submitted to the PIP for price improvement). See paragraph (e)(i) of Section 18 of Chapter V of the BOX Rules.
Back to Citation7. As detailed in the Notice, certain unrelated Limit Orders on the same side of the market as a PIP Order terminate the PIP prematurely, while certain unrelated Limit Orders on the opposite side of the market immediately execute against the PIP Order (and allow the PIP to continue if the PIP Order has not been filled). The proposal clarifies the circumstances in which these early terminations and immediate executions take place, as well as the rules governing the prices that the PIP Order and unrelated Limit Order receive in each of these circumstances.
Back to Citation8. The proposal specifies that the BOX Trading Host does not accept Improvement Orders that would lock or cross the BOX Book.
Back to Citation9. In addition, the Commission notes that BSE is currently obligated to provide certain reports to the Commission that provide data about BOX-Top and Market Orders that terminate the PIP prematurely, as well as BOX-Top and Market Orders that immediately execute against a PIP Order. BSE represents that it will provide the same information for Limit Orders that terminate the PIP prematurely or immediately execute against a PIP Order.
Back to Citation[FR Doc. E7-4503 Filed 3-12-07; 8:45 am]
BILLING CODE 8010-01-P