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 November 30, 2007, 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 Exchange has designated this proposal as one establishing or changing a due, fee, or other charge imposed by the Exchange under section 19(b)(3)(A)(ii) of the Act, and Rule 19b-4(f)(2) thereunder, which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule from interested persons.
I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change
The BSE is proposing to amend the Fee Schedule of the Boston Options Exchange (“BOX”). The proposed amendment will remove the Minimum Activity Charge (“MAC”) from the Fee Schedule of the BOX. The proposed amendment also will increase the number of options classes that will participate in the Liquidity Make or Take Pricing Structure (“Make or Take”). The text of the proposed rule change is available at BSE's principal office, the Commission's Public Reference Room, and http://www.bostonstock.com. Start Printed Page 72427
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
BOX currently charges its Market Making Participants a monthly fixed fee for each option class in which the Participant is assigned, known as the MAC. MAC fee levels are determined according to certain “categories” of options classes listed on BOX. The category for each class is determined by its total trading volume across all U.S. options exchanges as determined by Options Clearing Corporation (“OCC”) data. BOX is proposing to eliminate the MAC so Market Makers will only be charged fees for contracts which are traded. Such fees will be determined on a “Per Contract Execution” basis rather than by setting minimum fee levels that Market Making Participants must incur each month, regardless of the level of their trading activity.
Additionally, BOX currently applies an alternative pricing structure for certain options classes, referred to as Make or Take. Make or Take is currently applicable only to options classes participating in the Penny Pilot, as referenced in Chapter V, section 33 of the BOX Trading Rules. Make or Take pricing is driven by liquidity, whereby orders that add liquidity to the BOX Book receive a transaction credit and orders which take liquidity from the BOX Book are charged a transaction fee. The proposed amendment will increase the number of classes for which the Make or Take pricing structure will be applicable. The proposed classes being added to Make or Take are the twenty-five (25) most actively-traded, multiply-listed options classes on BOX which are presently not included in the Penny Pilot.
2. Statutory Basis
The Exchange believes that the proposal is consistent with the requirements of section 6(b) of the Act, in general, and section 6(b)(4) of the Act, in particular, which requires that an exchange provide for the equitable allocation of reasonable dues, fees, and other charges among its members and issuers and other persons using its facilities.
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 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 foregoing proposed rule change is filed pursuant to section 19(b)(3)(A)(ii) of the Act  and subparagraph (f)(2) of Rule 19b-4 thereunder, because it establishes or changes a fee applicable only to a member imposed by the Exchange. Accordingly, the proposal is effective upon Commission receipt of the filing. At any time within 60 days of the filing of such 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 proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
- Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or
- Send an e-mail to email@example.com. Please include File Number SR-BSE-2007-52 on the subject line.
- 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-2007-52. 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, on official business days between the hours of 10 a.m. and 3 p.m., located at 100 F Street, NE., Washington, DC 20549. Copies of such filing also will be available for inspection and copying at the principal office of BSE. 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-2007-52 and should be submitted on or before January 10, 2008.Start Signature
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Florence E. Harmon,
5. The “Original Penny Pilot Program Approval Order” listed the initial thirteen options classes participating in the Penny Pilot Program. See Securities Exchange Act Release No. 54789 (November 20, 2006), 71 FR 68654 (November 27, 2006) (SR-BSE-2006-49). On September 27, 2007, the Commission approved an extension and expansion of the Penny Pilot Program to include fifty additional classes, in two phases. See Securities Exchange Act Release No. 56566 (September 27, 2007), 72 FR 56400 (October 3, 2007) (SR-BSE-2007-40). Phase One began on September 28, 2007 and will continue for six months, until March 27, 2008. Phase One added twenty-two options classes to the Penny Pilot. Phase Two is scheduled to begin on March 28, 2008, and will continue for one year until March 27, 2009. During the second phase, the number of options classes trading in pennies will again increase.Back to Citation
[FR Doc. E7-24724 Filed 12-19-07; 8:45 am]
BILLING CODE 8011-01-P