Federal Register: May 20, 1999 (Volume 64, Number 97)NoticesPage 27609-27610From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr20my99-138

SECURITIES AND EXCHANGE COMMISSION

Release No. 34-41396; File No. SR-BSE-99-04Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change by the Boston Stock Exchange, Inc. Relating to Its Minor Rule Violation Plan

May 13, 1999.

Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934

[Page 27610](``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on March 26, 1999, the Boston Stock Exchange, Inc. (``BSE'' or ``Exchange'') filedwith 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. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

\1\ 15 U.S.C. 78s(b)(1).

\2\ 17 CFR 240.19b-4.

I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change

The Exchange seeks to amend the Summary Fine Schedule of the Minor Rule Violation Plan through the addition of violations of Rule 11Ac1-4 under the Act (``Display Rule'').\3\ The text of the proposed rule change is available at the Office of the Secretary, BSE, and at the Commission.

\3\ 17 CFR 240.11Ac1-4.

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 Exchange proposes to amend its Minor Rule Violation Plan (``Plan'') to include violations of the Display Rule.\4\ By amending the Summary Fine Schedule of the Plan, the Exchange will address certain violations of the Display Rule, which are deemed to be inadvertent, or without special aggravating or intentional purposes, through the use of fines rather than a full disciplinary procedure. Where violations of the Display Rule are intentional, however, the Exchange is not limited nor precluded from initiating more formal Disciplinary Proceedings under Chapter XXX or imposing sanctions of more or less than the recommended fines (not to exceed $2,500 in any event).

\4\ 17 CFR 240.11Ac1-4.

The Plan as amended would provide that failure to display a customer limit order immediately (no later than 30 seconds) after receipt (without a specific exclusion provided by the Display Rule) will result in a written warning for the initial offense; a $50 fine for the second offense; and a $100 fine for subsequent offenses. 2. Statutory Basis

The statutory basis for the proposed rule change is Section 6(b)(5) of the Act,\5\ in that it is designed to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in securities; and is not designed to permit unfair discrimination between customers, issuers, brokers or dealers. Additionally, the BSE believes the proposal is consistent with Section 11A(a)1(C)(iii) and (iv) of the Act.\6\ In adopting Section 11A, Congress found that it is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure the availability to brokers, dealers, and investors of information with respect to quotations for and transactions in securities, and to assure the practicability of brokers executing investors' orders in the best market.\7\

\5\ 15 U.S.C. 78f(b)(5).

\6\ 15 U.S.C. 78k-1(a)(1(C)(iii) and (iv).

\7\ Id.

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

No written comments were either solicited or received.

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

Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will:

A. by order approve such proposed rule change, or

B. institute proceedings to determine whether the proposed rule change should be disapproved.

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 filedwith 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-99-04 and should be submitted by June 20, 1999.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\8\

\8\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland, Deputy Secretary.

FR Doc. 99-12665Filed5-19-99; 8:45 amBILLING CODE 8010-01-M