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

[Federal Register: February 11, 2005 (Volume 70, Number 28)]

[Notices]

[Page 7315-7316]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr11fe05-118]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51137; File No. SR-BSE-2005-06]

Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Boston Stock Exchange, Inc. Relating to Its Minor Rule Violation Plan

February 4, 2005.

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 January 31, 2005, 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 prepared by the Exchange. The Exchange designated its filing as non-controversial pursuant to section 19(b)(3)(A) of the Act\3\ and Rule 19b-4(f)(6).\4\ Accordingly, the proposed rule change became effective upon filing. 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\ 2 17 CFR 240.19b-4.

\3\ 15 U.S.C. 78s(b)(3)(A).

\4\ 17 CFR 240.19b-4(f)(6).

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

    The Exchange seeks to amend its rules related to its Minor Rule Violation Plan (``MRVP''). The text of the proposed rule change is available on BSE's Web site (http://www.bostonstock.com/legal/index.html ), at BSE's principal office, and at the Commission's Public

    Reference Room.

  2. 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

    [[Page 7316]]

    Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements.

    1. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change

      1. Purpose

      The Exchange is proposing to add a new section to its MRVP which would set forth procedures for a member against whom formal disciplinary action is taken by the Exchange to consent to the charges being levied and waive formal disciplinary hearing. These procedures would be similar to those set forth in NASD Rule 9216, ``Acceptance, Waiver, and Consent; Plan Pursuant to SEC Rule 19d-1(c)(2),'' and provide that a BSE member may, upon being notified of disciplinary charges by the Exchange's Enforcement Department, execute a written letter which (1) accepts the charges, (2) consents to the imposition of a sanction, and (3) agrees to waive the right to a hearing of appeal to challenge the validity of the letter. In proposing such procedures, the Exchange is seeking to provide its members with an intermediary disciplinary step, short of a formal hearing, which would permit its members to avoid formal proceedings in instances where they accept liability from the outset. 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 promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating securities transactions, to remove impediments to perfect the mechanism of a free and open market and a national market system and, in general, to protect investors and the public interest.

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

    2. 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.

    3. 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 any comments on this proposed rule change.

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

    BSE asserts that the foregoing rule has become effective pursuant to Section 19(b)(3)(A) of the Act \6\ and Rule 19b-4(f)(6) thereunder \7\ because it does not significantly affect the protection of investors or the public interest or impose any significant burden on competition. BSE has requested that the Commission waive the requirement that the rule change not become operative for 30 days after the date of the filing, as set forth in Rule 19b-4(f)(6)(iii).\8\ The Commission finds good cause for the proposed rule change to become operative prior to the 30th day after the date of publication of notice of filing in the Federal Register. The Commission notes that the proposed rule is substantially similar to NASD Rule 9216,\9\ which was previously approved by the Commission after notice and comment and, therefore, does not raise any new regulatory issues.\10\

    \6\ 5 U.S.C. 78s(b)(3)(A).

    \7\ 17 CFR 240.19b-4(f)(6).

    \8\ 17 CFR 240.19b-4(f)(6)(iii).

    \9\ See Securities Exchange Release No. 32383 (May 28, 1993), 58 FR 31768 (June 4, 1993) (SR-NASD-93-6).

    \10\ Rule 19b-4(f)(6) also requires a self-regulatory organization to give written notice of a proposed rule change filed pursuant to this subsection at least five business days prior to filing. BSE complied with this requirement.

    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 furtherance of the purposes of the Act.

  4. 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:

    Electronic Comments

    Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml. ); or Send an e-mail to rule-comments@sec.gov. Please include

    File Number SR-BSE-2005-06 on the subject line.

    Paper Comments

    Send paper comments in triplicate to Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609.

    All submissions should refer to File Number SR-BSE-2005-06. 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. 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-2005-06 and should be submitted on or before March 4, 2005.

    For the Commission, by the Division of Market Regulation, pursuant to delegated authority.\11\

    \11\ 17 CFR 200.30-3(a)(12).

    Margaret H. McFarland, Deputy Secretary.

    [FR Doc. E5-581 Filed 2-10-05; 8:45 am]

    BILLING CODE 8010-01-P

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