01-13214. Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Boston Stock Exchange Adopting a Fee for Leases of Memberships

May 18, 2001.

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 April 30, 2001, the Boston Stock Exchange (“BSE” or “Exchange”) filed with the Securities and Exchange Commission (“SEC” or “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by BSE. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

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

The Exchange proposes to amend the Exchange's fee schedule to include a membership lease fee charged to members who choose to lease a membership from the Exchange.

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 the 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 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 purpose of the proposed rule change is to amend the Exchange's fee schedule to include a monthly fee equal to one percent of the last consummated seat sale, billed quarterly in arrears, for leasing Exchange memberships from the Exchange. This fee will be charged to all qualified members who lease memberships from the Exchange when no public inventory is available. The fee will be charged in addition to all other membership fees, and will be arranged through a separate lease agreement the Exchange and the lessee.^[3] The one percent fee figure was established based on recent lease agreements for Exchange memberships. The proposed lease fee will be in addition to any dues, fees or assessments charged by the Exchange. Moreover, the lessees of memberships will be subject to all other rules relevant to membership qualifications.

2. Statutory Basis

The Exchange believes that the proposed rule change is consistent with Section 6(b)(4) of the Act,^[4] in that the proposed rule change is designed to provide for the equitable allocation of reasonable dues, fees and other charges among the Exchange's members and other persons using its facilities.

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

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 designated the proposed rule change as a fee change pursuant to Section 19(b)(3)(A)(ii) of the Act ^[5] and Rule 19b-4(f)(2) thereunder.^[6] Accordingly, the proposed rule change will become effective upon filing. At any time within 60 days of the filing of such proposed rule change, the Commission may summarily abrogate such rule change if it appears to the Commission that such action is necessary in the public interest, for the protection of investors, or otherwise in 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, 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 the File Number SR-BSE-2001-02 and should be submitted June 15, 2001.

For the Commission, by the Division of Market Regulation, pursuant to delegated authority.^[7]

Jonathan G. Katz,

Secretary.

Footnotes

1.  15 U.S.C. 78s(b)(1).

2.  17 CFR 240.19b-4.

3.  The Board of Directors of the Exchange has authorized the Exchange to sell or lease up to 15 memberships out of 23 authorized, but unsold, memberships. The lessees of these memberships would have the same rights and obligations as all other members of the Exchange. Phone call between John A. Boese, Assistant Vice President, Rule Development and Market Structure, BSE, George W. Mann, Jr., General Counsel, BSE, Florence Harmon, Senior Special Counsel, Division of Market Regulation (“Division”), Commission, Sonia Patton, Attorney, Division, Commission, and John Riedel, Attorney, Division, Commission (May 15, 2001).

4.  15 U.S.C. 78f(b)(4).

5.  15 U.S.C. 78s(b)(3)(A)(ii).

6.  17 CFR 240.19b-4(f)(2).

7.  17 CFR 200.30-3(a)(12).