[Federal Register Volume 64, Number 149 (Wednesday, August 4, 1999)]
[Notices]
[Pages 42424-42426]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20026]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-41664; File No. SR-BSE-99-10]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by the Boston
Stock Exchange, Inc. Relating to the Minimum Variation for Nasdaq-100
Shares and Disclaimer of Liability With Respect to the Nasdaq-100 Index
July 27, 1999.
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 July 16, 1999, the Boston Stock Exchange, Inc. (``BSE'' or the
``Exchange'') filed with the Securities and Exchange Commission
(``Commission'' or the ``SEC'') the proposed rule change as
[[Page 42425]]
described in Items I and II below, which Items have been prepared by
the self-regulatory organizations. The Commission is publishing this
notice to solicit comments on the proposed rule change from interested
persons, and simultaneously is approving the filing.
---------------------------------------------------------------------------
\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 proposes to amend Exchange Chapter XXIV, Section 5,
Interpretations and Policies thereunder, to permit dealings in Nasdaq-
100 Shares of the Nasdaq-100 Trust (``Nasdaq-100 Shares'') in
increments smaller than the minimum variation, and to add proposed
Section 7 to Exchange Chapter XXIV relating to disclaimer of liability
with respect to the Nasdaq-100 Index.
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 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 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 Exchange is proposing to amend an interpretation to the
Portfolio Depository Receipt (``PDR'') listing rule set forth in
Exchange Chapter XXIV, Section 5 to permit dealings in Nasdaq-100
Shares in increments of \1/64\ of $1.00. The Nasdaq-100 Trust is a unit
investment trust sponsored by Nasdaq-Amex Investment Product Services,
Inc. with a portfolio based on the component stocks of the Nasdaq-100
Index. The Exchange intends to trade these securities pursuant to
unlisted trading privileges (``UTP''). These securities are currently
traded on the American Stock Exchange (``Amex'') in increments of \1/
64\ of $1.00 and, thus, the Exchange believes it is appropriate to
trade these securities on the Exchange with the same minimum increment
of \1/64\ of $1.00 as well.\3\
---------------------------------------------------------------------------
\3\ See Securities Exchange Act Release No. 41119 (February 26,
1999), 64 FR 11510 (March 9, 1999) (SR-Amex-98-34).
---------------------------------------------------------------------------
In connection with the Exchange's license agreement with the Nasdaq
Stock Market (``Nasdaq'') relating to, among other things, the use of
the name ``Nasdaq-100 Shares,'' and the disclaimer of liability
relating to the Nasdaq-100 Index, the Exchange is proposing to amend
Chapter XXIV to add a new Section 7 to codify a rule governing
disclaimers of liability relating to the Nasdaq-100 Index. The proposed
rule change is consistent with the disclaimer of liability language
adopted by the Amex in its Rule 1006.
2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\4\ in general, and furthers the
objectives of Section 6(b)(5),\5\ in particular, 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 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.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78f(b).
\5\ 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.
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. 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 at the
Commission's Public Reference Room. Copies of such filing will also be
available for inspection and copying at the principal office of the
BSE. All submissions should refer to File No. SR-BSE-99-10 and should
be submitted by August 25, 1999.
IV. Commission's Findings and Order Granting Accelerated Approval
of Proposed Rule Change
The Commission finds that the BSE's proposed rule change is
consistent with the requirements of the Act and the rules and
regulations thereunder applicable to a national securities exchange.\6\
Specifically, the Commission believes that the proposal is consistent
with Section 6(b)(5) of the Act \7\ because it will facilitate
transactions in securities by permitting the BSE: (1) to trade Nasdaq-
100 Shares, on a UTP basis, in increments of \1/64\th of $1.00, and (2)
to adopt a disclaimer of liability rule relating to the Nasdaq-100
Index, consistent with the license agreement between Nasdaq and the
Exchange.
---------------------------------------------------------------------------
\6\ In reviewing the proposed rule change, the Commission
considered its potential impact on efficiency, competition, and
capital formation. 15 U.S.C. 78c(f).
\7\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
The Exchange has requested that the Commission find good cause
pursuant to Section 19(b)(2) of the Act for approving the proposed rule
change prior to the thirtieth day after the publication of the proposal
in the Federal Register. The Commission believes that such action is
appropriate, in that the proposed rule change establishes the same
minimum trading variation as the Amex has adopted for Nasdaq-100
Shares. Further, the proposed rule relating to the disclaimer of
liability adopted by the Amex.\8\ For the reasons set forth above, the
Commission does not believe that this proposal raises any new
regulatory issues. Accordingly, the Commission finds that there is good
cause for approving the proposed rule change prior to the thirtieth day
after the publication of the proposal in the Federal Register.
---------------------------------------------------------------------------
\8\ The Amex disclaimer of liability provision was approved in
Securities Exchange Act Release Nos. 41119 (February 26, 1999), and
41562 (June 25, 1999). It was subject to the full notice and comment
process in Securities Exchange Act Release No. 41119 and no comments
were received with respect to the disclaimer.
---------------------------------------------------------------------------
V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\9\ that the
[[Page 42426]]
proposed rule change is hereby approved on an accelerated basis.
\9\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\10\
---------------------------------------------------------------------------
\10\ 17 CFR 200.30-3(a)912).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-20026 Filed 8-3-99; 8:45 am]
BILLING CODE 8010-01-M
