[Federal Register Volume 63, Number 5 (Thursday, January 8, 1998)]
[Notices]
[Pages 1134-1135]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-421]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-39504; File No. SR-NASD-97-96]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the National Association of 
Securities Dealers, Incorporated Relating to the Hearing Process Fees 
on Members That Are Parties to Arbitration Proceedings

December 31, 1997.
    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 December 
23, 1997, the National Association of Securities Dealers, Incorporated 
(``NASD'' or ``Association'') 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 self-
regulatory organization. The Commission is publishing this notice to 
solicit comments on the proposed rule change from interested persons.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD Regulation is proposing to amend Rule 10333(d) of the NASD's 
Code of Arbitration Procedure (``Code'') to adjust the Hearing Process 
Fee Schedule so that the amounts in dispute of the lowest brackets in 
the Rule 10333(d) hearing Process Fee Schedule are consistent with the 
dollar amount at which the Prehearing Process Fee is imposed. Below is 
the text of the proposed rule change. Proposed new language is in 
italics; proposed deletions are in brackets.

10333.  Member Surcharge and Process Fees

* * * * *
    Hearing Process Fee Schedule (accrues and becomes due and payable 
when the parties are notified of the date and location of the first 
hearing session)

------------------------------------------------------------------------
                                                                 Hearing
                       Damages requested                         process
                                                                   fee  
------------------------------------------------------------------------
$1-$25,000[30,000].............................................       $0
$25,000.01[30,000.01]-$50,000..................................    1,000
$50,000.01-$100,000............................................    1,500
$100,000.01-$500,000...........................................    2,500
$500,000.01-$1,000,000.........................................    3,500
$1,000,000.01-$5,000,000.......................................    4,500
More than $5,000,000...........................................    5,000

[[Page 1135]]

                                                                        
Unspecified....................................................    2,000
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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 self-regulatory organization 
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 self-regulatory organization 
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 December 11, 1997, NASD Regulation filed a proposed rule change 
with the Commission amending Rule 10333 of the Code to add a process 
fee on members named as parties to arbitration proceedings. The 
proposed rule change, which was submitted pursuant to Section 
19(b)(3)(A) of the Act, became effective upon filing. On December 15, 
1997, the Commission published a Notice of Filing and Immediate 
Effectiveness of the proposed rule change, announcing the filing of the 
amendment and that NASD Regulation would implement the new fee on 
January 2, 1998.\1\
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    \1\ See Securities Exchange Act Release No. 39451 (December 15, 
1997, 62 FR 67104 (December 23, 1997).
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    NASD Regulation is now proposing to amend the first two Hearing 
Process fee brackets so that the first bracket for which a hearing 
process fee will be assessed will be for cases where $25,000.01-$50,000 
is in dispute. This bracket in the fee schedule as originally filed was 
$30,000.01-$50,000. This amendment is consistent with NASD Regulation's 
original intent in adopting the fee. Moreover, the amendment will make 
the amounts in dispute of the lowest brackets in the Rule 10333(d) 
Hearing Process Fee Schedule consistent with the dollar amount at which 
the Prehearing Process fee is imposed (amounts in dispute of greater 
than $25,000). NASD Regulation plans to make this proposed rule change 
effective, along with the rest of the process fee, on January 2, 1998.
2. Statutory Basis
    NASD Regulation believes that the proposed rule change is 
consistent with the provisions of Section 15A(b)(5) of the Act \2\ in 
that the proposed rule change provides for the equitable allocation of 
reasonable charges among members and other persons using the 
Association's arbitration facility and requires member firm users to 
absorb a reasonable share of the costs of operating the arbitration 
program.
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    \2\ 15 U.S.C. 78o-3.
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Association does not believe the proposed rule change will 
impose any burden on competition.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

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

    The proposed rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A) of the Act \3\ and subparagraph (e) of Rule 19b-
4 thereunder,\4\ in that the proposal constitutes an amendment to a fee 
which the NASD imposes on its members. 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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    \3\ 15 U.S.C. 78s(b)(3)(A).
    \4\ 17 CFR 240.19b-4(e).
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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, N.W., Washington, D.C. 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 at 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 File No. SR-NASD-97-96 and should 
be submitted by January 29, 1998.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.
Jonathan G. Katz,
Secretary.
[FR Doc. 98-421 Filed 1-7-98; 8:45 am]
BILLING CODE 8010-01-M