[Federal Register Volume 70, Number 69 (Tuesday, April 12, 2005)]
[Notices]
[Pages 19138-19140]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1696]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51477; File No. SR-NYSE-2005-11]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by the New York Stock Exchange, 
Inc. Relating to the Annual Membership Fees Payable by Electronic 
Access Members of the Exchange

April 5, 2005.
    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 March 10, 2005, the New York Stock Exchange, Inc. (``NYSE'' or 
``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 
NYSE. The proposed rule change has been filed by the NYSE as a proposal 
establishing or changing a due, fee, or other charge, pursuant to 
Section 19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) 
thereunder,\4\ 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 NYSE proposes to revise its policy and price list with respect 
to the annual membership fees payable by electronic access members 
(``EAMs'').
    Below is the text of the proposed rule change. Proposed new 
language is in italics; proposed deletions are in [brackets].
* * * * *

                                              EAM Annual Fee Policy
                                                [Membership fees]
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                                                Electronic access
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          1989  Current price                1990  Existing formula price            1990  Proposed price
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$77,000(*).............................  $70,736 Calculated once per year     $63,642 (January-March 1990)
                                          (November) for the ensuing year;     Calculated quarterly; based on 70
                                          based on 70 percent of prior 12-     percent of 6-months average of
                                          month average (December through      Physical Access Membership fees,
                                          November including initiation fee    excluding initiation fee and
                                          and dues) of Physical Access         dues. (First quarter 1990 fee
                                          Membership fees.                     based on April-September 1989
                                                                               Physical Access fees.)
----------------------------------------------------------------------------------------------------------------
* 1988 fee, held constant for 1989.

    The membership fee payable by an electronic access member, with 
respect to each year of such membership, exclusive of fines and of such 
other charges as may be imposed pursuant to the Constitution, shall be 
the sum of (i) 90 of the 6 month average of the annual rentals payable 
under the bona fide leases of membership entered into during each of 
the six calendar months prior to the most recently completed 
quarter,\5\ (ii) $1,500, and (iii) with respect to the first year of 
such membership only, $5,000; provided, however, that if at any time 
the membership fee payable pursuant to Section 1(a) of Art. X of the 
Constitution is in excess of, or less than, $1,500 per year, the amount 
provided in clause (ii) above shall be correspondingly increased or 
reduced, and if the amount of the fee charged to a new member as 
established by the Board pursuant to Section 4 of Art. II of the 
Constitution is in excess of, or less than, $5,000, the amount provided 
in clause (iii) above shall be correspondingly increased or reduced. 
Such membership fee shall be paid in full prior to admission to 
membership, and prior to any renewal of such member's membership.
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    \5\ For example, the calculation of the EAM fee charged in the 
month of November is based on average lease prices during January-
June. The average lease for each of these months is based on the 
average lease of the six calendar months prior to the most recently 
completed quarter, so that the January average lease is based on the 
average lease during April-September of the prior year.
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    Notwithstanding the foregoing, in accordance with Art. X, Section 
1(c) of the Constitution, the membership fee payable by an electronic 
access member with respect to each year of such membership shall in no 
event be less than $13,500.
    The Board has approved, for calendar 2005, the effective 
elimination of the initiation fee, in a manner to be administered 
consistently by the Exchange, in the event an electronic access member 
otherwise becomes an Exchange member.
* * * * *

2005 Price List

* * * * *
Regular Members
    Dues--$1,500.00.
    Transfer fees for purchased and leased seat--5 percent of purchase 
price or last contracted sale (Minimum $1,000.00 Maximum $5,000).
Other
    Physical access--calculated monthly--Function of bona fide lease 
prices.
    Electronic access--calculated quarterly--[70 percent of prior 6 
month PAM price] The sum of (i) 90 percent of the 6 month average of 
the annual rentals payable under the bona fide leases of membership 
entered into during each of the six calendar months prior to the most 
recently completed

[[Page 19139]]

quarter,\1\ (ii) $1,500,\2\ and (iii) with respect to the first year of 
such membership only, $5,000.\3\
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    \1\ For example, the calculation of the EAM fee charged in the 
month of November is based on average lease prices during January-
June. The average lease for each of these months is based on the 
average lease of the six calendar months prior to the most recently 
completed quarter, so that the January average lease is based on the 
average lease during April-September of the prior year.
    \2\ If at any time the dues payable by regular members are in 
excess of, or less than, $1,500 per year, this amount shall be 
correspondingly increased or reduced.
    \3\ If at any time the maximum transfer fees for a purchased or 
leased seat payable by a new regular member are in excess of, or 
less than, $5,000, this amount shall be correspondingly increased or 
reduced. The Board has approved, for calendar 2005, the effective 
elimination of this initiation fee, in a manner to be administered 
consistently by the Exchange, in the event an electronic access 
member otherwise becomes an Exchange member.
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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 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.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Pursuant to Art. X, Section 1(c) of the Exchange's Constitution, 
the Board of Directors has authority to determine the membership fee 
payable by an EAM, subject to a requirement that the fee not be less 
than $13,500 annually. Currently, the annual membership fee payable by 
EAMs is 70 percent of the average price charged to physical access 
members (``PAMs'') during the two quarters prior to the most recently 
completed quarter. The PAM price for each month is calculated as the 
six-month average lease price for each of the prior six months. 
However, there are currently no PAMs, as the sole remaining PAM was 
converted to a lease in November 2004. As such, it is appropriate to 
adjust the formula for calculating EAM annual membership fees to remove 
references to PAM prices. In addition, the Exchange has determined that 
the difference between the cost of leasing and the price of an EAM 
should be narrowed. Accordingly, the proposed new EAM annual fee policy 
would increase the annual fee from 70 percent to 90 percent of what the 
PAM fee would have been, subject to the requirement that the fee not be 
less than $13,500 annually. In addition, the revised EAM fees will 
include the standard initiation fee (currently $5,000) \5\ in the first 
year of membership and the standard annual membership dues (currently 
$1,500).\6\ The initiation fee and the annual dues were originally 
charged to EAMs, although they had been removed when EAM fees were 
lowered in 1989.\7\ The Exchange's Board has approved, for calendar 
2005, the effective elimination of the initiation fee, in a manner to 
be administered consistently by the Exchange, in the event an EAM 
otherwise becomes an Exchange member. As is currently the case, EAM 
fees under the proposed revised policy will be calculated and fixed on 
a quarterly basis.
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    \5\ Transfer fees for purchased and leased seats equal 5% of the 
purchase price or last contracted sale of a seat, subject to minimum 
and maximum fees of $1,000 and $5,000 respectively. As seat prices 
currently exceed $1,000,000, the current initiation fee is the 
$5,000 maximum. See www.nyse.com/pdfs/2005pricelist_a.pdf.
    \6\ See http://www.nyse.com/pdfs/2005pricelist_a.pdf.
    \7\ See Securities Exchange Act Release No. 27552 (December 19, 
1989), 54 FR 53226 (December 27, 1989).
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2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of Section 6(b) of the Act,\8\ in general, and 
Section 6(b)(4) of the Act,\9\ in particular, in that the proposal is 
designed so that 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.
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    \8\ 8 15 U.S.C. 78f(b).
    \9\ 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 would 
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

    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 Exchange asserts that the foregoing proposed rule change has 
become effective upon filing pursuant to Section 19(b)(3)(A)(ii) of the 
Act \10\ and Rule 19b-4(f)(2) thereunder \11\ because it establishes or 
changes a due, fee or other charge imposed by the Exchange. At any time 
within 60 days of the filing of such 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 
purpose of the Act.
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    \10\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \11\ 17 CFR 240.19b-4(f)(2).
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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 an e-mail to [email protected]. Please include 
File Number SR-NYSE-2005-11 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., 
Washington, DC 20549-0609.
    All submissions should refer to File Number SR-NYSE-2005-11. 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

[[Page 19140]]

Room. Copies of such filing also will 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 File Number SR-NYSE-2005-11 and should be submitted on 
or before May 3, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\12\
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    \12\ 17 CFR 200.30-3(a)(12).
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 Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1696 Filed 4-11-05; 8:45 am]
BILLING CODE 8010-01-P