[Federal Register Volume 61, Number 88 (Monday, May 6, 1996)]
[Notices]
[Pages 20301-20302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11229]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37154; File No. SR-NASD-96-18]


Self-Regulatory Organizations; Notice of Filing and Order 
Granting Accelerated Approval of Proposed Rule Change by National 
Association of Securities Dealers, Inc. Relating to the Temporary 
Extension of Effectiveness of Arbitration Procedures for Large and 
Complex Cases

April 30, 1996.
    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 April 
30, 1996,1 the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Association'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') the proposed rule change as 
described in Items I and II below, which Items have been prepared by 
the NASD. The Commission is publishing this notice to solicit comments 
on the proposed rule change from interested persons.
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    \1\ The NASD originally submitted the proposed rule change on 
April 24, 1996. Amendment No. 1, submitted on April 29, 1996, states 
that the Board of Directors of NASD Regulation, Inc. authorized the 
filing of the proposed rule change with the Commission on April 26, 
1996. Amendment No. 2, submitted on April 30, 1996, amends Rule 
10334(h) to extend the effective date of that Rule to August 1, 
1996.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NASD is proposing to temporarily extend the effectiveness of 
the arbitration Procedures for Large and Complex Cases, Rule 10334 of 
the Code of Arbitration Procedure (``Code''),2 to August 1, 1996. 
Below is the text of the proposed rule change. Proposed new language is 
in italics; proposed deletions are in brackets.
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    \2\ Formerly Section 46 of the Code of Arbitration Procedure, 
NASD Manual, Code of Arbitration Procedure, Art. III, Sec. 46 (CCH) 
para. 3746.
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Code of Arbitration Procedure
* * * * *

Procedures for Large and Complex Cases

Rule 10334

* * * * *

[[Page 20302]]

Temporary Effectiveness

    (h) This Section 46 shall remain in effect [for one year from May 
2, 1995] until August 1, 1996 unless modified or extended prior thereto 
by the Board of Governors.

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 NASD 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 NASD 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

    The Procedures for Large and Complex Cases, adopted effective May 
2, 1995, for a one-year pilot test and codified at Rule 10334 of the 
Code (formerly Section 46) will expire on May 2, 1996. Since Rule 10334 
became effective, the Rule has been used on occasion by parties to 
large and complex cases.
    In addition, the NASD's Arbitration Policy Task Force, which issued 
its report on ``Securities Arbitration Reform'' in January 1996, has 
recommended that the one-year pilot test of Rule 10334 be extended in 
order to permit the NASD to gather additional data and analyze the low 
usage rate of the procedures.
    The NASD believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(6) of the Act 3 because it 
permits the NASD to continue to specify procedures in the Code for 
large and complex cases. This serves the public interest by enhancing 
the satisfaction and perceived fairness of such proceedings by the 
parties to such proceedings. To the extent the parties to such 
proceedings express increased satisfaction with the resolution of 
eligible matters, the goal of providing the investing public with a 
fair, efficient and cost-effective forum for the resolution of disputes 
is advanced.
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    \3\ 15 U.S.C. 78o-3.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    The NASD 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, as amended.

(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. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    The NASD has requested that the Commission find good cause pursuant 
to Section 19(b)(2) for approving the proposed rule change prior to the 
30th day after publication in the Federal Register. The Commission 
finds that the proposed rule change is consistent with the requirements 
of the Act and the rules and regulations thereunder applicable to the 
NASD and, in particular, the requirements of Section 15A and the rules 
and regulations thereunder. The Commission finds good cause for 
approving the proposed rule change prior to the 30th day after the date 
of publication of notice of filing thereof in that accelerated approval 
will benefit users of the arbitration process in that providing a 
temporary extension of the procedures for large and complex cases will 
permit arbitration participants to continue to use the procedures until 
a one-year extension is submitted to the Commission for approval.
    Rule 10334 expires by its terms on May 2, 1996. The NASD is asking 
that the effectiveness of the Rule be temporarily extended until August 
1, 1996, in order to permit the NASD to submit a proposed rule change 
to extend the effectiveness of the rule for one year. In addition, the 
application of the Rule to any case submitted to arbitration is 
voluntary. Thus, extending the effectiveness of the Rule will not have 
any adverse impact on the investing public.

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 in the 
Commission's Public Reference Room. Copies of such filing will also be 
available for inspection and copying at the principal office of the 
NASD. All submissions should refer to SR-NASD-96-18 and should be 
submitted by May 27, 1996.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change SR-NASD-96-18 be, and hereby is, approved 
through August 1, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-11229 Filed 5-3-96; 8:45 am]
BILLING CODE 8010-01-M