Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the Boston Stock Exchange, Inc. Relating to an Interpretation to the BEACON Liability Rule

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-34075; File No. SR-BSE-94-03]

Self-Regulatory Organizations; Notice of Filing and Immediate

Effectiveness of Proposed Rule Change by the Boston Stock Exchange,

Inc. Relating to an Interpretation to the BEACON Liability Rule

May 18, 1994.

Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934

(``Act''), 15 U.S.C. 78s(b)(1), notice is hereby given that on February

22, 1994, 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 self-regulatory organization. The

Commission is publishing this notice to solicit comments on the

proposed rule change from interested person.\1\

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

\1\The Exchange has agreed to an additional 60-day period for

abrogation of the instant proposed rule change to begin on such date

as the proposed Competing Specialist Initiative (SR-BSE-93-12) may

be approved.

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

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

of the Proposed Rule Change

The Boston Stock Exchange seeks to amend its BEACON Liability Rule

through the adoption of an interpretation relating to competing

specialists. Specifically, the Rule will be supplemented by the

following provision:

.01 In the event that there are two or more specialists competing

in a given stock, the specialist to whom an order is directed (if it

appears on the BEACON System's Member Firm Interface Safe-Store

File) will be responsible for that order.

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 IV 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 purpose of the proposed rule change is to provide an

interpretation to Chapter XXXIII, section 7 of the Rules of the

Exchange regarding BEACON liability to clarify the impact of the

Competing Specialist Initiative, which is pending approval before the

Commission, on the liability rule.

2. Statutory Basis

The basis under the Act for the proposed rule change is section

6(b)(5) in that the rule is designed to promote just and equitable

principles of trade and 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, or dealers.

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 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 comments on the

proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for

Commission Action

The foregoing rule change has become effective pursuant to section

19(b)(3)(A) of the Act and subparagraph (e) of Rule 19b-4 thereunder.

At any time within 60 days from May 18, 1994,\2\ 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.

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

\2\On May 18, 1994 the Commission approved the Competing

Sepcialist Initiative (SR-BSE-93-12). See note 1, infra.

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

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and

arguments concerning the foregoing. Persons making written submissions

should file six copies thereof with the Secretary, Securities and

Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549.

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 Section, 450 Fifth Street, NW.,

Washington, DC 20549. 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-94-03 and should be

submitted by June 14, 1994.

For the Commission, by the Division of Market Regulation,

pursuant to delegated authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 94-12574 Filed 5-23-94; 8:45 am]

BILLING CODE 8010-01-M