[Federal Register Volume 64, Number 127 (Friday, July 2, 1999)]
[Notices]
[Pages 36058-36059]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-16868]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41563; File Nos. SR-BSE-97-07 and SR-BSE-99-09]
Self-Regulatory Organizations; Notice of Withdrawal of Proposed
Rule Change and Amendment No. 1 Thereto by the Boston Stock Exchange,
Inc. Relating to Its Specialist Performance Evaluation Program and
Notice of Filing and Order Granting Accelerated Approval of Proposed
Rule Change by the Boston Stock Exchange, Inc. Relating to Its
Specialist Performance Evaluation Program
June 25, 1999.
On October 8, 1998, the Boston Stock Exchange, Inc. (``BSE'' or
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') a proposed rule change (SR-BSE-98-07), pursuant to
Section 19(b)(1) of the Securities Exchange Act of 1934 (``Act''),\1\
and Rule 19b-4 thereunder,\2\ to amend the depth measure calculations
in its Specialist Performance Evaluation Program (``SPEP'') pilot
program. The Exchange submitted Amendment No. 1 to its proposed rule
change (SR-BSE-98-07) on November 13, 1998.\3\ Notice of the proposed
rule change, as amended, was published on December 11, 1998, in the
Federal Register, to solicit comment from interested persons.\4\ On
December 17, 1998, the Exchange submitted Amendment No. 2 to its
proposal.\5\ On December 28, 1998, the Commission noticed and granted
accelerated approval of Amendment No. 2.\6\ On June 10, 1999, the
Exchange withdrew those portions of its proposed rule change relating
to permanent approval of the SPEP pilot program and to the proposed
changes to its depth measures.\7\
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the Exchange requested permanent
approval of the SPEP pilot program and deleted its request for
accelerated approval and retroactive implementation of the proposed
rule change. See Rule 19b-4 filing, SR-BSE-98-07, dated November 6,
1998 (``Amendment No. 1'').
\4\ Securities Exchange Act Release No. 40746 (December 3,
1998), 63 FR 68490 (December 11, 1998).
\5\ In Amendment No. 2, the Exchange (1) requested an extension
of the SPEP pilot program for a six-month period ending on June 30,
1999, or until the Commission approves the Exchange's proposal to
make it permanent, whichever occurred first, and (2) made a
technical change to its rule. See Letter From Karen A. Aluise, Vice
President, Exchange, to Richard Strasser, Assistant Director,
Division of Market Regulation (``Division''), Commission, dated
December 14, 1998 (``Amendment No. 2'')
\6\ Securities Exchange Act Release No. 40844 (December 28,
1998), 64 FR 1041 (January 7, 1999).
\7\ See Letter from Karen A. Aluise, Vice President, Exchange,
to Richard Strasser, Assistant Director, Division, Commission, dated
June 9, 1999.
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Pursuant to Section 19(b)(1) of the Act,\8\ and Rule 19b-4
thereunder,\9\ notice is hereby given that on June 10, 1999, the
Exchange filed with the Commission the proposed rule change (SR-BSE-99-
09), which requests that the Commission approve an extension of the
SPEP pilot until March 31, 2000. The proposed rule change is described
in Items I and II 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 and to grant
accelerated approval to this rule proposal.
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\8\ 15 U.S.C. 78s(b)(1).
\9\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to extend its SPEP pilot program until March
31, 2000.\10\
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\10\ Telephone conversation between Karen A. Aluise, Vice
President, Exchange, and Terri Evans, Attorney, Division,
Commission, on June 17, 1999.
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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 III 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 regularly evaluates the performance of its specialists
under the SPEP pilot program. Under the SPEP
[[Page 36059]]
pilot, specialists are evaluated based on objective measures, such as
turnaround time, price improvements, depth and added depth. Generally,
any specialist who receives a deficient score in one or more objective
measures may be required to attend a meeting with the Performance
Improvement Action Committee or the Market Performance Committee.\11\
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\11\ Id.
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The current pilot program will expire on June 30, 1999. The
Exchange seeks to extend its SPEP pilot until March 31, 2000, while the
Exchange considers revising its depth measure calculations.\12\
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\12\ The Exchange plans on seeking permanent approval of the
SPEP pilot at the same time that it submits its revised depth
measure calculations. Id.
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2. Statutory Basis
The statutory basis for the proposed rule change is Section 6(b)(5)
of the Act,\13\ in that it 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 and
dealers.
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\13\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden of 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 written comments on
the proposed rule change.
III. 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 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 in Washington, DC. 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
No. SR-BSE-99-09 and should be submitted by July 23, 1999.
IV. Commission's Findings and Order Granting Accelerated Approval
of Proposed Rule Change
The Commission finds that the BSE's proposal to extend the SPEP
pilot program until March 31, 2000, is consistent with the requirements
of the Act and the rules and regulation thereunder. Specifically, the
Commission finds that the amendment is consistent with Section 6(b)(5)
of the Act,\14\ which requires that the rules of the Exchange be
designed to promote just and equitable principles of trade, 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. The Commission believes that the proposed nine-month
extension of the pilot program should allow the Exchange to continue to
assess specialist performance while allowing the Exchange adequate time
to consider amending its two depth measure calculations.
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\14\ 15 U.S.C. 78f(b)(5).
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The Commission finds good cause for granting the Exchanges' request
for a nine-month extension of the SPEP pilot prior to the thirtieth day
after the date of publication of notice of filing thereof in the
Federal Register. Among the obligations imposed upon specialists by the
Exchange, and by the Act and the rules promulgated thereunder, is the
maintenance of fair and orderly markets in their securities. To ensure
that specialists fulfill these obligations, it is important that the
Exchange be able to evaluate specialist performance. The BSE's SPEP
pilot assists the Exchange in conducting its evaluation. Therefore, the
Commission believes good cause exists to approve the extension of the
pilot program until March 31, 2000, on an accelerated basis.
Accordingly, the Commission believes that granting accelerated approval
of the requested extension is appropriate and consistent with Sections
6(b)(5) and 19(b)(2) of the Act.\15\
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\15\ 15 U.S.C. 78f(b)(5) and 78s(b)(2).
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It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\16\ that the proposed rule change (SR-BSE-99-09) is hereby
approved on an accelerated basis until March 31, 2000.\17\
\16\ 15 U.S.C. 78s(b)(2).
\17\ In approving the proposed rule change, the Commission has
considered its impact on efficiency, competition, and capital
formation. 15 U.S.C. 78c(f).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\18\
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\18\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-16868 Filed 7-1-99; 8:45 am]
BILLING CODE 8010-01-M
