[Federal Register: July 21, 2008 (Volume 73, Number 140)]
[Notices]
[Page 42385-42386]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jy08-97]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-58149; File No. SR-FINRA-2008-034]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Order Granting Accelerated
Approval of Proposed Rule Change Relating to the Elimination of Certain
Fee References in the Incorporated NYSE Rules
July 11, 2008.
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 June 26, 2008, Financial Industry Regulatory Authority, Inc.
(``FINRA'') (f/k/a National Association of Securities Dealers, Inc.
(``NASD'')) 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 substantially prepared by FINRA.
This order provides notice of the proposed rule change and approves the
proposed rule change on an accelerated basis.
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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
FINRA is proposing to amend Incorporated NYSE Rules 311, 342, 345,
346, and 416 to delete references to legacy New York Stock Exchange
(``NYSE'') fees that are not charged by FINRA pursuant to those rules.
The text of the proposed rule change is available at FINRA, the
Commission's Public Reference Room, and at http://www.finra.org/
RulesRegulation/RuleFilings/index.htm.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA 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. FINRA 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
On July 30, 2007, NASD and NYSE consolidated their member firm
regulation operations into a combined organization, FINRA. As part of
the consolidation, NYSE committed to transfer to FINRA certain
regulatory revenues for the remainder of 2007. NYSE fees subject to the
transfer agreement included a gross FOCUS (Financial and Operational
Combined Uniform Single Report) fee \3\ (comparable to NASD's Gross
Income Assessment) \4\ and registration fees for branch offices \5\
(comparable to NASD's Branch Office System Processing Fee) \6\ and
registered representatives \7\ (comparable to NASD's registration fees
for the registration of representatives or principals).\8\
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\3\ See Securities Exchange Act Release No. 56181 (August 1,
2007), 72 FR 44206 (August 7, 2007) (SR-NYSE-2007-70).
\4\ See Section 1(c) of Schedule A to FINRA's By-Laws
(``Schedule A''). The Commission recently approved a new fee
structure for the Gross Income Assessment that combines the two
legacy fee structures of NASD and NYSE. See Securities Exchange Act
Release No. 57474 (March 11, 2008), 73 FR 14517 (March 18, 2008).
\5\ See NYSE Rule 342.11.
\6\ See Section 4(a) of Schedule A.
\7\ See NYSE Rule 345.14.
\8\ See Section 4(b) of Schedule A.
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As part of the consolidation, FINRA evaluated whether to
consolidate or eliminate any duplicative fees, as well as whether to
maintain or increase any non-duplicative fees. As a result of that
process, FINRA determined that a number of fees previously charged by
NYSE could be eliminated because they are duplicative of other FINRA
fees. On December 31, 2007, NYSE filed a proposed rule change with the
Commission to eliminate certain NYSE registration and regulatory fees
effective as of January 1, 2008.\9\ The current proposed rule change
deletes references in the Incorporated NYSE Rules to NYSE fees that
were eliminated by NYSE effective as of January 1, 2008, and that are
not charged by FINRA pursuant to those rules.
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\9\ See Securities Exchange Act Release No. 57093 (January 3,
2008), 73 FR 1654 (January 9, 2008) (SR-NYSE-2007-127) (``Release
No. 34-57093'').
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Specifically, the proposed rule change would delete from the
Incorporated NYSE Rules references to the following fees:
The NYSE membership application fee referenced in NYSE
Rule 311; \10\
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\10\ FINRA charges its own application fees pursuant to Sections
4(b) and 4(e) of Schedule A.
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The NYSE Branch Office Fees referenced in NYSE Rule
342.11; \11\
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\11\ FINRA charges a similar fee pursuant to Section 4(a) of
Schedule A.
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The NYSE Registered Persons Fees referenced in NYSE Rule
345.14; \12\
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\12\ FINRA charges a similar fee pursuant to Section 4(b) of
Schedule A.
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The Statutory Disqualification Filing Fee and the
Statutory Disqualification Review Fee referenced in NYSE Rule 346(f);
\13\ and
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\13\ FINRA charges a similar fee pursuant to Section 12 of
Schedule A.
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The late filing fee referenced in NYSE Rule 416(b).\14\
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\14\ FINRA charges a similar fee pursuant to Section 4(g) of
Schedule A.
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FINRA proposes that the effective date of this proposed change be
retroactive to January 1, 2008, to coincide with the NYSE's elimination
of these fees as of January 1, 2008.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions
[[Page 42386]]
of Section 15A(b)(5) of the Act,\15\ which require, among other things,
that FINRA rules provide for the equitable allocation of reasonable
dues, fees, and other charges among members and issuers and other
persons using any facility or system that FINRA operates or controls.
FINRA believes that deleting the references in the Incorporated NYSE
Rules to fees that FINRA does not impose pursuant to those rules will
reduce confusion and conform the Incorporated NYSE Rules to FINRA's
practice.
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\15\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
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
Written comments were neither solicited nor 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. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-FINRA-2008-034 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street, NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-FINRA-2008-034. This
file number should be included on the subject line if e-mail is used.
To help the Commission process and review your comments more
efficiently, please use only one method. The Commission will post all
comments on the Commission's Internet Web site (http://www.sec.gov/
rules/sro.shtml). 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, on official
business days between the hours of 10 a.m. and 3 p.m. Copies of the
filing also will be available for inspection and copying at the
principal office of FINRA. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-FINRA-2008-034 and should be submitted on or before August 11, 2008.
IV. Commission's Findings and Order Granting Accelerated Approval
The Commission finds that the proposed rule change is consistent
with the requirements of the Act and the rules and regulations
thereunder applicable to a national securities association and, in
particular, the requirements of Section 15A(b)(5) of the Act \16\ and
the rules and regulations thereunder.\17\
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\16\ 15 U.S.C. 78o-3(b)(5).
\17\ In approving this rule change, the Commission notes that it
has considered the proposed rule's impact on efficiency,
competition, and capital formation. See 15 U.S.C. 78c(f).
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The Commission notes that FINRA's proposed rule change to eliminate
references to the NYSE legacy fees in FINRA's Incorporated NYSE Rules
is consistent with NYSE's elimination of these fees that took effect on
January 1, 2008.\18\ Because these legacy NYSE fees are not charged by
FINRA, the Commission believes that it is appropriate for FINRA to
remove references to these fees from the Incorporated NYSE Rules.\19\
The Commission also believes that approving these changes on a
retroactive basis to January 1, 2008, is appropriate because that is
the effective date of NYSE's elimination of these fees.\20\
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\18\ See Release No. 34-57093, supra note 9.
\19\ 15 U.S.C. 78o-3(b)(5).
\20\ See Release No. 34-57093, supra note 9.
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The Commission finds good cause to approve the proposed rule change
prior to the thirtieth day after the date of publication of notice of
filing in the Federal Register. Granting accelerated approval of the
proposed rule change would help reduce any confusion FINRA members may
have, because these legacy NYSE fees no longer are being charged, and
would conform these Incorporated NYSE Rules to FINRA's current
practice. Accordingly, the Commission believes there is good cause,
consistent with Sections 15A(b)(5) and 19(b) of the Act,\21\ to approve
the proposed rule change on an accelerated basis.
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\21\ 15 U.S.C. 78o-3(b)(5) and 78s(b).
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V. Conclusion
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\22\ that the proposed rule change (File No. SR-FINRA-2008-034) be,
and hereby is, approved on an accelerated basis.
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\22\ 15 U.S.C. 78s(b)(2).
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-16599 Filed 7-18-08; 8:45 am]
BILLING CODE 8010-01-P