[Federal Register: February 3, 2005 (Volume 70, Number 22)]
[Notices]
[Page 5716-5718]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03fe05-108]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51085; File No. SR-NYSE-2005-10]
Self Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the New York Stock Exchange,
Inc. Relating to Voluntary Supplemental Procedures for Selecting
Arbitrators
January 27, 2005.
Pursuant to Section 19(b)(1)\1\ of the Securities Exchange Act of
1934 (``Act''),\2\ and Rule 19b-4 thereunder, notice is hereby given
that on January 18, 2005, the New York Stock Exchange, Inc. (``NYSE''
or ``Exchange'') filed with the Securities and Exchange Commission
(``Commission'') the proposed amendments to its arbitration rules as
described in Items I and II below, which items have been prepared by
the Exchange. The Exchange filed the proposed rule change pursuant to
Section 19(b)(3)(A) of the Act \3\ and Rule 19b-4(f)(6) thereunder,\4\
which renders the proposal effective upon filing with
[[Page 5717]]
the Commission. 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\ 15 U.S.C. 78a.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change consists of an extension until July 31,
2005, of the Voluntary Supplemental Procedures for Selecting
Arbitrators (``Supplemental Procedures'').
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. 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 proposed rule change is intended to extend until July 31, 2005
the Supplemental Procedures, which were approved by the Commission,
most recently in SR-NYSE-2004-28,\5\ for a six-month period ending
January 31, 2005.
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\5\ See Exchange Act Release No. 49915 (June 25, 2004), 69 FR
39993 (July 1, 2004).
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The Exchange currently has several methods by which arbitrators are
assigned to cases, including the traditional method under NYSE Rule
607, pursuant to which Exchange staff appoints arbitrators to cases
(the ``Traditional Method''). On August 1, 2000, the Exchange
implemented a two-year pilot program to allow parties, on a voluntary
basis, to select arbitrators under two alternative methods (in addition
to the Traditional Method).\6\ Upon expiration of the two-year pilot,
the Exchange renewed the pilot for an additional two years, which
expired on July 31, 2004,\7\ and then again for an additional six
months through January 31, 2005.\8\
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\6\ See Exchange Act Release No. 43214 (August 28, 2000), 65 FR
53247 (September 1, 2000) (SR-NYSE-00-34).
\7\ See Exchange Act Release No. 46372. See also Exchange Act
Release No. 47929 (May 27, 2003), 68 FR 32791 (June 2, 2003) (SR-
NYSE-2003-15).
\8\ See Exchange Act Release No. 49915, supra note 5.
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Under the Supplemental Procedures, the first alternative to the
Traditional Method is the Random List Selection method by which the
parties are provided randomly generated lists of public-classified and
securities-classified arbitrators. The parties have ten days to strike
and rank the names on the lists. Based on mutual ranking of the lists,
the highest-ranking arbitrators are invited to serve on the case. If a
panel cannot be generated from the first list, a second list is
generated, with three potential arbitrators for each vacancy, and one
peremptory challenge available to each party for each vacancy. If
vacancies remain after the second list has been processed, arbitrators
are then randomly assigned to serve, subject only to challenges for
cause.
The second alternative to the Traditional Method is entitled
Enhanced List Selection, in which six public-classified and three
securities-classified arbitrators are selected, based on their
qualifications and expertise, by Exchange staff. The lists are then
sent to the parties. The parties have a limited number of strikes to
use and are required to rank the arbitrators not stricken. Based on
mutual ranking of the lists, the highest-ranking arbitrators are
invited to serve on the case.
Finally, the Supplemental Procedures provide that the Exchange will
accommodate the use of any reasonable alternative method of selecting
arbitrators that the parties decide upon, provided that the parties
agree. Absent agreement as to the use of Random List Selection,
Enhanced List Selection, or any other reasonable alternative method,
the Traditional Method is used.
The Exchange, pursuant to a separate filing,\9\ is proposing
amendments to NYSE Rule 607 which would, in effect, make permanent a
variation of the pilot program described herein. Pending Commission
consideration of those amendments, the Exchange proposes to extend the
pilot period for the Supplemental Procedures for an additional six
months, until July 31, 2005.
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\9\ See SR-NYSE-2005-02, filed with the Commission on January 4,
2005.
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b)(5)\10\ of the Act in that it promotes just and
equitable principles of trade by ensuring that members and member
organizations and the public have a fair and impartial forum for the
resolution of their disputes.
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\10\ 15 U.S.C. 78f(b)(5).
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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 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 written 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 one that:
(i) Does not significantly affect the protection of investors or the
public interest; (ii) does not impose any significant burden on
competition; and (iii) does not become operative for 30 days from the
date on which it was filed, or such shorter time as the Commission may
designate. Therefore, the foregoing rule change has become effective
pursuant to Section 19(b)(3)(A) of the Act\11\ and Rule 19b-4(f)(6)\12\
thereunder. At any time within 60 days of the filing of the 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 Act.
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\11\ 15 U.S.C. 78s(b)(3)(A).
\12\ 17 CFR 240.19b-4(f)(6).
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Pursuant to Rule 19b-4(f)(6)(iii) under the Act,\13\ the proposal
may not become operative for 30 days after the date of its filing, or
such shorter time as the Commission may designate if consistent with
the protection of investors and the public interest, and the Exchange
must file notice of its intent to file the proposed rule change at
least five business days beforehand. The Exchange has requested that
the Commission waive the five-day pre-filing requirement and the 30-day
operative delay so that the proposed rule change will become
immediately effective upon filing.
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\13\ 17 CFR 240.19b-4(f)(6)(iii).
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The Commission is exercising its authority to waive the five-day
pre-filing requirement and believes that waiver of the 30-day operative
delay is consistent with the protection of investors and the public
interest.\14\ In this regard, the
[[Page 5718]]
Commission notes that the proposal is the extension of a pilot program
that has been in effect at the Exchange since August 2000. For these
reasons, the Commission designates the proposed rule change as
effective and operative immediately. Nothing in the current notice
should be interpreted as suggesting the Commission is predisposed to
approving the proposed variation of the pilot program.
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\14\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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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. 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-NYSE-2005-10 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW.,
Washington, DC 20549-0609.
All submissions should refer to File Number SR-NYSE-2005-10. 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. Copies of such
filing also will be available for inspection and copying at the
principal office of the NASD. 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-NYSE-2005-10 and should be submitted on or before March
10, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-405 Filed 2-2-05; 8:45 am]
BILLING CODE 8010-01-P