[Federal Register Volume 68, Number 223 (Wednesday, November 19, 2003)]
[Notices]
[Pages 65336-65337]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-28895]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-48769; File No. SR-NYSE-2003-21]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 Thereto by the New York Stock Exchange, Inc. 
To Increase Its Fingerprint Processing Fee

November 10, 2003.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on July 22, 2003, the New York Stock Exchange, Inc. (``NYSE'' or 
``Exchange'') submitted to 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 NYSE. The Exchange 
amended its proposal on August 29, 2003.\3\ The Commission is 
publishing this notice to solicit comments on the proposed rule change, 
as amended, from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ See letter from Darla C. Stuckey, Corporate Secretary, to 
Nancy Sanow, Assistant Director, Division of Market Regulation 
(``Division''), Commission, dated August 28, 2003, replacing NYSE's 
original Form 19b-4 filing in its entirety (``Amendment No. 1''). In 
Amendment No. 1, the NYSE converted the proposed rule change from a 
filing made pursuant to Section 19(b)(3)(A) to a Section 19(b)(2) 
filing.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The Exchange proposes to amend its 2003 Price List to increase its 
fingerprinting processing fee.\4\ Below is the text of the proposed 
rule change, as amended. Proposed new language is italicized; proposed 
deleted text is [bracketed].
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    \4\ See 17 CFR 240.17f-2.
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* * * * *

                  NYSE 2003 Price List--Regulatory Fees
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Fingerprint Processing....................    --new     $35.00 [$25.50]
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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 NYSE included statements 
concerning the purpose of, and basis for, the proposed rule change and 
discussed any comments it received on the proposed rule change, as 
amended. 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 NYSE proposes to amend its 2003 Price List to increase its 
fingerprint processing fee. Rule 17f-2 of the Act \5\ requires the 
fingerprinting of, among others, every partner, director, officer, and 
certain specified employees of a national securities exchange member, 
broker, and dealer. Further, such fingerprints must be submitted to the 
U.S. Attorney General's Office or its designee for processing and 
review.
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    \5\ 17 CFR 240.17f-2.
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    Pursuant to a plan filed with and approved by the Commission in 
accordance with paragraph (c) of Rule 17f-2\6\ (``Plan''), the Exchange 
acts as a processor of fingerprints whereby it forwards fingerprint 
cards (and attendant payments) to the Federal Bureau of Investigation 
(``FBI'').
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    \6\ 17 CFR 240.17f-2(c).
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    The Exchange performs this service for non-registered employees of 
members, member organizations, and a limited number of others \7\ 
pursuant to Rule 17f-2\8\ (e.g., transfer agents). Further, the 
Exchange processes some fingerprint checks on behalf of both 
prospective NYSE members not associated with a member organization and 
current members seeking to change firms. In any instance where the 
Exchange provides FBI fingerprint processing services to a registered 
person, the results are forwarded to the National Association of 
Securities Dealers, Inc. (``NASD'') by the member or member 
organization for posting to the registered person's central 
registration depository record.
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    \7\ The NYSE has represented that it has contacted the affected 
group of non-members and that none of the contacted non-members has 
objected. According to the NYSE, the number of interested persons 
that are not associated with a member or member organization is a 
very small percentage of the total number of persons who utilize the 
Exchange's fingerprint processing service. Teleconference between 
Mary Anne Furlong, Director, Rule and Interpretive Standards, NYSE, 
and Christopher B. Stone, Special Counsel, Division, Commission 
(September 23, 2003).
    \8\ 17 CFR 240.17f-2.
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    The current total fee charged by the Exchange per fingerprint card 
is $25.50, which amount consists of a $24.00 processing fee charged by 
the FBI (of which $2.00 is returned to the NYSE) and a $1.50 processing 
fee charged by the Exchange. The Exchange is proposing to raise the 
processing fee to $11.00, an increase of $9.50. This increase would 
bring the total processing fee per card to $35.00. The most recent fee 
increase occurred in January of 1994 when the FBI raised its processing 
fee from $23.00 to $24.00. The fee of $1.50 charged by the Exchange has 
not increased since the Plan's inception in 1976.
    The proposed fee increase is directly related to costs incurred 
from the Exchange's transition from a manual to an electronic method of 
submitting fingerprint cards to the FBI.\9\ This transition has 
resulted in a significant improvement in client service. Upgrades to 
the Exchange system have reduced processing time per card from an 
average of three weeks to a current turnaround time of 24 to 48 hours.
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    \9\ The NYSE has represented that it intends to amend its Plan 
to reflect this change. Teleconference between Mary Anne Furlong, 
Director, Rule and Interpretive Standards, NYSE, and Ronesha A. 
Butler, Attorney, Division, Commission (November 10, 2003).
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    In addition to recouping consulting and programming expenses 
incurred during the system upgrade, the increase would offset the cost 
of maintaining the service. The Exchange also believes that the 
increase would bring the Exchange's processing fee more in line with 
similar services provided by NASD.
2. Statutory Basis
    The Exchange believes that the proposed rule change, as amended, is 
consistent with Section 6(b) of the Act \10\ in general, and furthers 
the objectives of Section 6(b)(4) of the Act \11\ because the rules of 
the Exchange provide for the equitable allocation of reasonable dues, 
fees, and other charges among its members and issuers and other persons 
using its facilities. The Exchange believes that the proposed rule 
change is also consistent with Section 6(b)(5)\12\ of the Exchange Act 
in that it enables the Exchange to recover its costs with respect to 
fingerprint card processing.
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    \10\ 15 U.S.C. 78f(b).
    \11\ 15 U.S.C. 78f(b)(4).
    \12\ 15 U.S.C. 78f(b)(5).

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[[Page 65337]]

B. Self-Regulatory Organization's Statement on Burden on Competition

    The NYSE believes that the proposed rule change, as amended, will 
not 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

    Written comments on the proposed rule change, as amended, were 
neither solicited nor received.

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

    Within 35 days of the date of publication of this notice in the 
Federal Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. by order approve such proposed rule change, or
    B. institute proceedings to determine whether the proposed rule 
change should be disapproved.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change, as amended, is consistent with the Act. Persons making written 
submissions should file six copies thereof with the Secretary, 
Securities and Exchange Commission, 450 Fifth Street, NW., Washington, 
DC 20549-0609. 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 NYSE. All submissions should refer to SR-NYSE-
2003-21 and should be submitted by December 10, 2003.
    For the Commission, by the Division of Market Regulation, 
pursuant to the delegated authority.\13\
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    \13\ 17 CFR 200.30-3(a)(12).

Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-28895 Filed 11-18-03; 8:45 am]
BILLING CODE 8010-01-P