[Federal Register: August 29, 2005 (Volume 70, Number 166)]
[Notices]
[Page 51102-51103]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr29au05-92]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52316; File No. SR-NYSE-2005-56]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Amendments to Exchange Rule 629 (``Schedule of Fees'') To
Establish Processing Fees for Members, Member Organizations, and Allied
Members That Are Parties to Arbitration Proceedings
August 22, 2005.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act''), and Rule 19b-4 \2\ thereunder, notice is hereby
given that on August 10, 2005, the New York Stock Exchange, Inc.
(``NYSE'' or the ``Exchange'') filed with the Securities and Exchange
Commission (``SEC'' or the ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the Exchange. For purposes of Section 19(b)(3)(A)(ii) of the Act \3\
and Rule 19b-4(f)(2) thereunder,\4\ NYSE has designated the proposed
rule change as establishing or changing a due, fee, or other charge
imposed by the self-regulatory organization on its members, which
renders the proposal effective upon filing with 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\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
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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 amendments to Rule 629 to
impose processing fees on members, member organizations, and allied
members in connection with arbitration proceedings in which more than
$25,000 is in dispute. Below is the text of the proposed rule change to
Rule 629. Proposed new language is in italics; proposed deletions are
in [brackets].
Rule 629 Schedule of fees
(a) through (j) No Change.
* * * * *
(k) Arbitrator Selection and Hearing Scheduling Processing Fees
(1) Each member, member firm, member corporation or allied member
(hereinafter referred to as any ``entity'') that is a party to an
arbitration proceeding in which more than $25,000 is in dispute will
pay the following non-refundable processing fees:
(a) An arbitrator selection fee of $750, due at the time the
parties are sent the names of proposed arbitrators; and,
(b) A hearing scheduling fee in the applicable amount set forth in
the schedule below, due when the parties are notified of the date and
location of the first hearing session.
------------------------------------------------------------------------
Hearing
Amount of dispute scheduling
fee
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$1-$25,000................................................. $0
$25,000.01-$50,000......................................... $1,000
$50,000.01-$100,000........................................ $1,700
$100,000.01-$500,000....................................... $2,750
$500,000.01-$1,000,000..................................... $4,000
$1,000,000.01-$5,000,000................................... $5,000
More than $5,000,000....................................... $5,500
Unspecified................................................ $2,200
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(2) If an associated person of an entity is a party, the entity or
entities that
[[Page 51103]]
employed the associated person at the time of the events which gave
rise to the dispute, claim or controversy will be charged the
processing fees, even if the entity is not a party. No entity shall be
assessed more than one arbitrator selection processing fee and one
hearing scheduling processing fee in any arbitration proceeding.
(3) The processing fees for arbitrator selection and hearing
scheduling shall not be chargeable under 629(c) to a party other than
the entity.
* * * * *
A. 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 aspects of such
statements.
1. Purpose
The proposed amendments to Rule 629 would establish certain
processing fees for members, member organizations, and allied members
that are parties to arbitration proceedings in which more than $25,000
is in dispute. These fees would be assessed: (1) When the names of the
proposed arbitrators are sent to the parties; and (2) when the date and
location of the hearing are sent to the parties. The processing fees
would be assessed on the members, member organizations, and allied
members when their associated person(s) are the subject of claims, even
if the member, member organization, or allied member is not a party.
However, no member, member organization, or allied member would be
assessed more than one arbitrator selection fee and one hearing
scheduling fee in any arbitration proceeding.
The processing fee, assessed when the names of the arbitrators are
sent to the parties, would be fixed and not vary based on the amount in
dispute. The processing fee, assessed when the date and location of the
hearing are sent to the parties, would vary based on the amount in
dispute. Processing fees would not be assessed on claims of $25,000 or
less, as these claims are generally decided by one arbitrator on the
papers, without an actual hearing being held.
These fees would be assessed only on members, member organizations,
and allied members; in no circumstances would processing fees be
charged to or assessed against public customers.
As the arbitration caseload has increased over the past several
years, the attendant costs to the Exchange in maintaining the
arbitration forum have also increased. The assessment of processing
fees would offset a portion of the increased costs.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(4) \5\ that an exchange have rules that
provide for the equitable allocation of reasonable dues, fees, and
other charges among its members and other persons using its facilities.
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\5\ 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
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 foregoing rule change has become effective pursuant to Section
19(b)(3)(A) \6\ of the Act and Rule 19b-4(f)(2) \7\ under the Act. The
NYSE shall implement the proposed rule change thirty days after
publication of the proposed rule change in the Federal Register.\8\ At
any time within 60 days of the filing of this 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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\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(2).
\8\ Telephone conversation between Karen Kupersmith, Director of
Arbitration, NYSE, and Lourdes Gonzalez, Assistant Chief Counsel,
Division of Market Regulation, Commission, (August 22, 2005).
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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 e-mail to rule-comments@sec.gov. Please include File
Number SR-NYSE-2005-56 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-NYSE-2005-56. 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, 100 F Street, NE.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of the NYSE. 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 the File Number SR-NYSE-2005-56 and should
be submitted on or before September 19, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
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\9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4714 Filed 8-26-05; 8:45 am]
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