[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
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$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