[Federal Register Volume 70, Number 166 (Monday, August 29, 2005)]
[Notices]
[Pages 51102-51103]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-4714]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52316; File No. SR-NYSE-2005-56]


Self-Regulatory Organizations; New York Stock Exchange, Inc.; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Amendments to Exchange Rule 629 (``Schedule of Fees'') To 
Establish Processing Fees for Members, Member Organizations, and Allied 
Members That Are Parties to Arbitration Proceedings

August 22, 2005.
    Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of 
1934 (the ``Act''), and Rule 19b-4 \2\ thereunder, notice is hereby 
given that on August 10, 2005, the New York Stock Exchange, Inc. 
(``NYSE'' or the ``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 Exchange. For purposes of Section 19(b)(3)(A)(ii) of the Act \3\ 
and Rule 19b-4(f)(2) thereunder,\4\ NYSE has designated the proposed 
rule change as establishing or changing a due, fee, or other charge 
imposed by the self-regulatory organization on its members, 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 proposed rule change consists of amendments to Rule 629 to 
impose processing fees on members, member organizations, and allied 
members in connection with arbitration proceedings in which more than 
$25,000 is in dispute. Below is the text of the proposed rule change to 
Rule 629. Proposed new language is in italics; proposed deletions are 
in [brackets].

Rule 629 Schedule of fees

    (a) through (j) No Change.
* * * * *
    (k) Arbitrator Selection and Hearing Scheduling Processing Fees
    (1) Each member, member firm, member corporation or allied member 
(hereinafter referred to as any ``entity'') that is a party to an 
arbitration proceeding in which more than $25,000 is in dispute will 
pay the following non-refundable processing fees:
    (a) An arbitrator selection fee of $750, due at the time the 
parties are sent the names of proposed arbitrators; and,
    (b) A hearing scheduling fee in the applicable amount set forth in 
the schedule below, due when the parties are notified of the date and 
location of the first hearing session.

------------------------------------------------------------------------
                                                               Hearing
                     Amount of dispute                        scheduling
                                                                 fee
------------------------------------------------------------------------
$1-$25,000.................................................           $0
$25,000.01-$50,000.........................................       $1,000
$50,000.01-$100,000........................................       $1,700
$100,000.01-$500,000.......................................       $2,750
$500,000.01-$1,000,000.....................................       $4,000
$1,000,000.01-$5,000,000...................................       $5,000
More than $5,000,000.......................................       $5,500
Unspecified................................................       $2,200
------------------------------------------------------------------------

    (2) If an associated person of an entity is a party, the entity or 
entities that

[[Page 51103]]

employed the associated person at the time of the events which gave 
rise to the dispute, claim or controversy will be charged the 
processing fees, even if the entity is not a party. No entity shall be 
assessed more than one arbitrator selection processing fee and one 
hearing scheduling processing fee in any arbitration proceeding.
    (3) The processing fees for arbitrator selection and hearing 
scheduling shall not be chargeable under 629(c) to a party other than 
the entity.
* * * * *

A. 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.
1. Purpose
    The proposed amendments to Rule 629 would establish certain 
processing fees for members, member organizations, and allied members 
that are parties to arbitration proceedings in which more than $25,000 
is in dispute. These fees would be assessed: (1) When the names of the 
proposed arbitrators are sent to the parties; and (2) when the date and 
location of the hearing are sent to the parties. The processing fees 
would be assessed on the members, member organizations, and allied 
members when their associated person(s) are the subject of claims, even 
if the member, member organization, or allied member is not a party. 
However, no member, member organization, or allied member would be 
assessed more than one arbitrator selection fee and one hearing 
scheduling fee in any arbitration proceeding.
    The processing fee, assessed when the names of the arbitrators are 
sent to the parties, would be fixed and not vary based on the amount in 
dispute. The processing fee, assessed when the date and location of the 
hearing are sent to the parties, would vary based on the amount in 
dispute. Processing fees would not be assessed on claims of $25,000 or 
less, as these claims are generally decided by one arbitrator on the 
papers, without an actual hearing being held.
    These fees would be assessed only on members, member organizations, 
and allied members; in no circumstances would processing fees be 
charged to or assessed against public customers.
    As the arbitration caseload has increased over the past several 
years, the attendant costs to the Exchange in maintaining the 
arbitration forum have also increased. The assessment of processing 
fees would offset a portion of the increased costs.
2. Statutory Basis
    The basis under the Act for this proposed rule change is the 
requirement under Section 6(b)(4) \5\ that an exchange have rules that 
provide for the equitable allocation of reasonable dues, fees, and 
other charges among its members and other persons using its facilities.
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    \5\ 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 will 
impose any burden on competition 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 foregoing rule change has become effective pursuant to Section 
19(b)(3)(A) \6\ of the Act and Rule 19b-4(f)(2) \7\ under the Act. The 
NYSE shall implement the proposed rule change thirty days after 
publication of the proposed rule change in the Federal Register.\8\ At 
any time within 60 days of the filing of this 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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    \6\ 15 U.S.C. 78s(b)(3)(A).
    \7\ 17 CFR 240.19b-4(f)(2).
    \8\ Telephone conversation between Karen Kupersmith, Director of 
Arbitration, NYSE, and Lourdes Gonzalez, Assistant Chief Counsel, 
Division of Market Regulation, Commission, (August 22, 2005).
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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 e-mail to [email protected]. Please include File 
Number SR-NYSE-2005-56 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-9303.

All submissions should refer to File Number SR-NYSE-2005-56. 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 Room, 100 F Street, NE., 
Washington, DC 20549. Copies of such filing will also 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 the File Number SR-NYSE-2005-56 and should 
be submitted on or before September 19, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\9\
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    \9\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4714 Filed 8-26-05; 8:45 am]
BILLING CODE 8010-01-P