[Federal Register: June 27, 2003 (Volume 68, Number 124)]
[Notices]
[Page 38409-38411]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27jn03-128]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-48066; File No. SR-Amex-2003-49]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the American Stock Exchange
LLC To Revise Its Fee Schedule in Connection With the Administration of
Forms U-4 and U-5 Through NASD's Web-Based Central Registration
Depository System
June 19, 2003.
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 May 28, 2003, the American Stock Exchange LLC (``Amex'' 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 Exchange. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to revise its fee schedule in connection with
the
[[Page 38410]]
administration of Forms U-4 and U-5 through the National Association of
Securities Dealers, Inc.'s (``NASD'') Web-based Central Registration
Depository system (``Web CRD'') [reg].\3\ The proposed fee schedule is
available at the Office of the Secretary, the Amex, and at the
Commission.\4\
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\3\ CRD is a registered trademark of NASD and the North American
Securities Administrators Association, Inc.
\4\ In connection with the instant proposal, the Exchange filed
an effective on filing rule proposal to amend Amex Rule 340,
Disapproval of Employees, and Amex Rule 341, Approval of Registered
Employees and Officers, and to adopt new Amex Rule 359, Application
and Termination Forms (Forms U-4 and U-5), to provide for the
processing of the Form U-4 and Form U-5 by the Web CRD system for
all individuals required to be registered with or approved by the
Exchange. See Securities Exchange Act Release No. 48067 (File No.
SR-Amex-2003-48).
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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 IV below. The Exchange has prepared summaries, set forth in
sections A, B, and C below, of the most significant parts of such
statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
Amex Rule 340 currently requires Amex members and member
organizations to submit Forms U-4 (Uniform Application for Securities
Industry Registration or Transfer) and U-5 (Uniform Termination Notice
for Securities Industry Registration) for their employees with access
to the trading floor (e.g., members and clerks). The Exchange also has
long required persons who seek either to become members or to own a
membership to submit Forms U-4 in connection with their membership
applications. These forms currently are submitted to the Exchange's
Membership Services Division as paper documents.
The Exchange is now proposing to require all its members, member
organizations and seat owners to use NASD's Web CRD as the mechanism
for submitting required Forms U-4 and U-5 filings to the Exchange.\5\
The Exchange anticipates that, during the period between September 3
and September 19, 2003, Amex members and member organizations will
electronically file Forms U-4 with Web CRD for all individuals who then
work on the trading floor who have not previously submitted a Form U-4
to Web CRD. Going forward from September 3, 2003, the Exchange also
will require individuals who have not previously registered with the
Exchange and who (i) seek to become a regular, options principal, or
associate member, (ii) seek to become a limited trading permit holder,
(iii) seek to own a regular, options principal, associate membership or
limited trading permit, or (iv) are or should be an approved person or
allied member, to electronically file Form U-4 with Web CRD.
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\5\ A number of individuals that work on the trading floor
already have submitted Forms U-4 to Web CRD if they work for dual
Amex/NASD member firms and their job responsibilities require
registration with NASD.
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The CRD system is a Web-based system that provides broker-dealers
and their associated persons with ``one-stop filing'' with the
Commission, NASD, and other self-regulatory organizations (``SROs'')
and regulators. The CRD system is operated by NASD and is used by
participating regulators in connection with registering and licensing
broker-dealers and their associated persons. The Exchange believes that
automating the review of registration applications and termination
notices by transitioning all Forms U-4 and U-5 filings to Web CRD would
enable the Exchange to more efficiently perform its regulatory
responsibilities with respect to members and member organizations and,
thereby, would ultimately enhance investor protection.
In addition, the Exchange is proposing to revise its registration
fees in connection with the implementation of Web CRD for filing Forms
U-4 and U-5. The new registration fees would take effect when the
Exchange requires the use of Web CRD, which currently is scheduled for
September 3, 2003. Members and member organizations would be instructed
to pay the CRD processing fees directly to NASD through Web CRD. NASD
would collect the appropriate processing fees in connection with the
Amex member or member organization effecting a registration through Web
CRD and retain or disburse to Amex the fee as described below.
The following are the proposed Web CRD processing fees. First, the
proposed revisions to the fee schedule would implement an $85 CRD
Processing Fee charged by NASD for all Initial, Dual Registration,
Transfer, and Re-license Form U-4 filings. This fee, combined with the
current, corresponding Amex fees, would bring the total amount paid to
NASD for Initial Individual and Dual Registrations to $145 ($60 Amex
Standard Application Fee plus $85 CRD Processing Fee), and the total
amount paid to NASD for Transfer and for Re-licensing to $125 ($40 Amex
Standard Application Fee plus $85 CRD Processing Fee). The Amex
Application Fees of $60 (for Initial Individual Registration) and $40
(for Transfers and for Re-licensing) would be collected on behalf of
and disbursed back to Amex by NASD. These fees would offset the costs
to the Amex of reviewing and processing all applications.
Second, the proposed revisions to the fee schedule would implement
a $95 Disclosure Processing Fee charged by NASD in connection with
Forms U-4 and U-5 for all filings with new or amended disclosure
information. There is no corresponding Amex fee. The Amex, however,
would continue to assess a $30 Termination Fee in connection with all
Form U-5 filings. The Termination Fee would be collected by NASD on
behalf of and disbursed back to Amex.
Third, the proposed revisions to the fee schedule would implement a
$30 NASD Annual System Processing Fee assessed only during renewals.
Therefore, the total annual processing/maintenance cost charged at the
renewal cycle per registered person would be $77, which includes the
current $47 Amex annual Renewal fee that would be collected on behalf
of Amex by NASD and covers the costs of the Exchange associated with
the registration program.
Fourth, the proposal would raise the current $25 fee for
fingerprinting to $35 and transfers this fee from the ``Member Fee'' to
the ``Registration'' section of the Exchange's fee schedule. This fee
would be retained by NASD, as the NASD would process fingerprint cards
as part of the Exchange's migration to the Web CRD system. (The NASD
would remit $22.00 of this fee to the FBI as its processing fee.) The
Amex also would implement a $13.00 fee for Posting Fingerprint Results
Processed through other SROs. This fee would be retained by NASD and
would be imposed where NASD accepts the results of fingerprints
processed by the NASD through another SRO.
In addition to the fees outlined above, Amex members and member
organizations would be required to pay a one-time Web CRD System
Transition Fee of $85 per person to transition to
[[Page 38411]]
Web CRD the individuals currently registered with Amex that are not on
Web CRD. This is a fee payable to the NASD to cover its processing
costs for the migration to Web CRD. Furthermore, any individual
transitioned to Web CRD who has a ``yes'' answer to a disclosure
question on the U-4 would be assessed a $95 Disclosure Fee which would
be retained by NASD.
In connection with this filing, the Exchange also proposes to
delete language in its fee schedule that pertains to a fee waiver that
has expired. In addition, the Exchange proposed to update the
``Electronic access fee'' under ``Membership Fees'' in the fee schedule
to reflect a change to electronic access fees approved by the
Commission in SR-Amex-2001-15.\6\ This item is amended to delete the
``10% of average membership seat sale price, set annually'' provision
and to replace it with the access fee of $61,363.00.\7\
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\6\ See Securities Exchange Act Release No. 44337 (May 22,
2001), 66 FR 29369 (May 30, 2001).
\7\ Amex corrects the figure in this proposed rule change from
$61,262.00, as it was stated in the filing, to $61,363.00, which is
the electronic access fee adopted from SR-Amex-2001-15. Amex notes
that the fee schedule that was attached to the proposed rule change
does correctly state $61,363.00 as the fee. Telephone conversation
between Bill Floyd-Jones, Associate General Counsel, Amex, and Cyndi
Rodriguez, Special Counsel, Division of Market Regulation,
Commission, on June 10, 2003.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act \8\ in general, and furthers the
objectives of Section 6(b)(4)\9\ in particular, because it is designed
to provide for the equitable allocation of reasonable dues, fees, and
other charges among its members, issuers and other persons using its
facilities.
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\8\ 15 U.S.C. 78f(b).
\9\ 15 U.S.C. 78f(b)(4).
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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 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
Written comments on the proposed rule change were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \10\ and subparagraph (f)(2) of Rule 19b-4
thereunder \11\ because it establishes or changes a due, fee, or other
charge imposed by the Exchange. 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 or appropriate in the public interest, for the
protection of investors, or otherwise in furtherance of the purposes of
the Act.
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
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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 in the
Commission's Public Reference Room. Copies of the filing will also be
available for inspection and copying at the principal office of the
Amex. All submissions should refer to File No. SR-Amex-2003-49 and
should be submitted by July 18, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\12\
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\12\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-16335 Filed 6-26-03; 8:45 am]
BILLING CODE 8010-01-P