regulatory organizations; proposed rule changes: Boston Stock Exchange, Inc.,

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Federal Register: February 10, 1998 (Volume 63, Number 27)NoticesPage 6787-6788From the Federal Register Online via GPO Access [wais.access.gpo.gov]

DOCID:fr10fe98-129

SECURITIES AND EXCHANGE COMMISSION

Release No. 34-39617; File No. SR-BSE-97-6Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by Boston Stock Exchange, Inc., Relating to its BEACON Liability Rule

February 3, 1998.

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

[Page 6788](``Act''),\1\ notice is hereby given that on January 20, 1998, the Boston Stock Exchange, Inc. (``Exchange'') filedwith the Securities and Exchange Commission the proposed rule as described in Items, I, II and III below, which items have been prepared by the self-regulatory organization.\2\ The Commission is publishing this notice to solicit comments on the proposed rule from interested persons.

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

\2\ See letter from Thomas Frain, Staff Attorney, Exchange, to Kevin Ehrlich, Attorney, Division of Market Regulation, Commission, dated January 20, 1998 (``Amendment No. 1''). The Exchange originally submitted the proposal on October 6, 1997. However, Amendment No. 1, which is a substantive amendment, restricts the scope of the filing by limiting the Exchange's BEAM-related disclaimer to instances involving a member or member organization's reliance on the Boston Exchange Automated Communication Order- routing Network (``BEACON'') data feed to the Boston Exchange- Automated Monitoring (``BEAM'') system.

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

The Exchange seeks to modify its rule regarding losses sustained by members as a result of their use of the Boston Exchange Automated- Surveillance Monitoring System.

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 self-regulatory organization included statements concerning the purpose of and basis for the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The self-regulatory organization 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 bring the Exchange's BEAM system within the purview of Chapter XXXIII, Section 7 (BEACON Liability). This section disclaims Exchange liability for losses related to the BEACON system, from which the BEAM system receives its data ``feed.'' Whereas losses related to the BEACON system are determined by the appearance of an order on the Member Firm Interface Safe-Store file, BEAM related losses are assessed directly to the affected member or member organization utilizing the BEAM system. 2. Statutory Basis

The Exchange believes the proposed rule change is consistent with Section 6(b) of the Act \3\ in general and furthers the objectives of Section 6(b)(5) \4\ of the Act in that the proposed rule change 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; and is not designed to permit unfair discrimination between customers, issuers, brokers, or dealers.

\3\ 15 U.S.C. 78f(b).

\4\ 15 U.S.C. 78f(b)(5).

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 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 Exchange has asserted that the proposed rule change (i) will not significantly affect the protection of investors or the public interest; (ii) will not impose any significant burden on competition; and (iii) will not become operative for 30 days after the date of this filing. The proposed rule change was originally submitted to the Commission on October 6, 1997. However, the submission of substantive Amendment No. 1 on January 20, 1998 delays the statutorily required implementation date to February 19, 1998.\5\ For the foregoing reasons, the rule filing will become operative as a ``non-controversial'' rule change pursuant to Rule 19b-4(e)(6) under the Act.\6\ The Commission notes that the Exchange did not submit a pre-filing of this proposal to the staff five days prior to the formal filing of the proposal. However, the staff has determined to waive the pre-filing requirement.

\5\ The Commission notes that any substantive amendment to a proposed rule change filedunder Section (e)(6) of Rule 19b-4 causes the 30 day delayed implementation period to be restarted from the date of the filing of the amendment.

\6\ 17 CFR 240.19b-4.

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 the 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, N.W., Washington, D.C. 20549. 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. Sec . 552, will be available for inspection and copying in the Commission's Public Reference Room. Copies of the filing will also be available for inspection and copying at the principal office of the Exchange. All submissions should refer to the file number SR-BSE-97-6 and should be submitted by March 3, 1998.

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

\7\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland, Deputy Secretary.

FR Doc. 98-3277Filed2-9-98; 8:45 amBILLING CODE 8010-01-M

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