

[Federal Register: July 2, 2007 (Volume 72, Number 126)]
[Notices]               
[Page 36082-36083]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02jy07-101]                         

-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-55950; File No. SR-BSE-2007-09]

 
Self-Regulatory Organizations; Boston Stock Exchange, Inc.; Order 
Approving a Proposed Rule Change as Modified by Amendment No. 1 Thereto 
Relating to Appointment of Market Makers

June 25, 2007.

I. Introduction

    On February 20, 2007, the Boston Stock Exchange, Inc. (``BSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to grant the authority for the Exchange to approve 
Market Maker appointments instead of the Board or a committee 
designated by the Board and to provide a process for those Market 
Makers who wish to withdraw from trading an option issue within their 
appointment. The Exchange filed Amendment No. 1 to the proposed rule 
change on May 11, 2007. The proposed rule change, as amended, was 
published for comment in the Federal Register on May 23, 2007.\3\ The 
Commission received no comments on the proposal.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See Securities Exchange Act Release No. 55774 (May 16, 
2007), 72 FR 29019.
---------------------------------------------------------------------------

II. Description of the Proposal

    The Exchange proposes to amend Section 4 (Appointment of Market 
Makers) of Chapter VI of the BOX Rules to grant the authority for the 
Exchange to approve Market Maker appointments instead of the Board or 
committee designated by the Board, as the rule currently states. This 
proposed change would allow the regulatory staff of the Exchange to 
approve Market Maker appointments. According to the Exchange, the BSE 
regulatory staff is more accessible than the Board and this change 
would help with the expediency of the Market Marker allocation approval 
process.
    The Exchange also has proposed to add a provision to establish a 
process for those Market Makers who wish to withdraw from trading an 
option issue within their appointment.\4\ A Market Maker may withdraw 
from an appointment as long as the Market Maker provides BOX with three 
business days written notice of its intent to withdraw from an 
appointment. If such written notice is not provided to BOX, then the 
Market Maker may be subject to formal disciplinary action.
---------------------------------------------------------------------------

    \4\ See Proposed Section 4, subparagraph (i), Chapter VI of the 
BOX Rules.
---------------------------------------------------------------------------

III. Discussion

    After careful review, the Commission finds that the proposed rule 
change, as amended, is consistent with the requirements of the Act and 
the rules and regulations thereunder applicable to a national 
securities exchange \5\ and, in particular, the requirements of Section 
6 of the Act.\6\ Specifically, the Commission finds that the proposal 
is consistent with Section 6(b)(5) of the Act,\7\ in that the proposal 
has been designed to promote just and equitable principles of trade, 
and to protect investors and the public interest. The Commission 
believes the proposal to grant the Exchange the authority to approve 
Market Maker appointments, instead of the Board, should help make the 
Market Marker allocation approval process more efficient, thereby 
potentially increasing liquidity on the Exchange. The proposal also 
provides transparency to the Exchange's process governing Market Makers 
who wish to

[[Page 36083]]

withdraw from trading an option issue within their appointment.
---------------------------------------------------------------------------

    \5\ The Commission has considered the amended proposed rule 
change's impact on efficiency, competition and capital formation. 15 
U.S.C. 78c(f).
    \6\ 15 U.S.C. 78f.
    \7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------

IV. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the 
Act,\8\ that the proposed rule change (SR-BSE-2007-09), as modified by 
Amendment No. 1, is approved.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(2).

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
---------------------------------------------------------------------------

    \9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

Florence E. Harmon,
Deputy Secretary.
 [FR Doc. E7-12675 Filed 6-29-07; 8:45 am]

BILLING CODE 8010-01-P
