Self-Regulatory Organizations; New York Stock Exchange LLC; Notice of Filing of Proposed Changes and Amendment No. 1 thereto to Rules 601, 607, 612 and 629 Relating to Single Arbitrators for Claims not Exceeding $200,000, 78499-78501 [E6-22401]
Download as PDF
Federal Register / Vol. 71, No. 250 / Friday, December 29, 2006 / Notices
(ii) as to which the Exchange 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.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.6
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6–22399 Filed 12–28–06; 8:45 am]
BILLING CODE 8011–01–P
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
pwalker on PROD1PC69 with NOTICES
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2006–109 on the
subject line.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54982; File No. SR–NYSE–
2006–61]
Self-Regulatory Organizations; New
York Stock Exchange LLC; Notice of
Filing of Proposed Changes and
Amendment No. 1 thereto to Rules 601,
607, 612 and 629 Relating to Single
Arbitrators for Claims not Exceeding
$200,000
December 20, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 2 thereunder,
notice is hereby given that on July 13,
Paper Comments
2006, the New York Stock Exchange
• Send paper comments in triplicate
LLC (‘‘NYSE’’ or the ‘‘Exchange’’) filed
to Nancy M. Morris, Secretary,
with the Securities and Exchange
Securities and Exchange Commission,
Commission (‘‘Commission’’) the
Station Place, 100 F Street, NE.,
proposed rule change as described in
Washington, DC 20549–1090.
Items I, II, and III below, which Items
All submissions should refer to File
have been prepared by the NYSE. On
Number SR–NYSE–2006–109. This file
December 19, 2006, the NYSE filed
number should be included on the
Amendment No. 1 to the proposed rule
subject line if e-mail is used. To help the change (‘‘Amendment No. 1’’).3 The
Commission process and review your
Commission is publishing this notice to
comments more efficiently, please use
solicit comments on the proposed rule
only one method. The Commission will change, as amended, from interested
post all comments on the Commission’s persons.
Internet Web site (https://www.sec.gov/
I. Self-Regulatory Organization’s
rules/sro.shtml). Copies of the
Statement of the Terms of Substance of
submission, all subsequent
the Proposed Rule Change
amendments, all written statements
with respect to the proposed rule
Under the proposed rule change,
change that are filed with the
matters in controversy involving
Commission, and all written
customer or non-member claims not
communications relating to the
exceeding $200,000 (excluding costs
proposed rule change between the
and interest) would be decided by one
Commission and any person, other than public arbitrator, unless the customer or
non-member requests that the matter be
those that may be withheld from the
decided by one securities industry
public in accordance with the
arbitrator.4 In addition, the proposed
provisions of 5 U.S.C. 552, will be
rule change would reduce several
available for inspection and copying in
the Commission’s Public Reference
6 17 CFR 200.30–3(a)(12).
Room. Copies of such filing also will be
1 15 U.S.C. 78s(b)(1).
available for inspection and copying at
2 17 CFR 240.19b–4.
the principal office of the Exchange. All
3 In Amendment No. 1, which supplemented the
comments received will be posted
original filing, the Exchange provided more
without change; the Commission does
information regarding the proposed amendments to
certain arbitration fees and hearing deposits, and
not edit personal identifying
clarified certain aspects of the rule filing.
information from submissions. You
4 NYSE stated that approximately one-third of
should submit only information that
NYSE arbitration matters since 2002 have involved
you wish to make available publicly. All claims of less than $200,000. Telephone
conversation among Karen Kupersmith, Director of
submissions should refer to File
Arbitration, NYSE; Lourdes Gonzalez, Assistant
Number SR–NYSE–2006–109 and
Chief Counsel—Sales Practices, Commission; and
should be submitted on or before
Michael Hershaft, Special Counsel, Commission
January 19, 2007.
(Dec. 20, 2006).
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18:15 Dec 28, 2006
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PO 00000
Frm 00105
Fmt 4703
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78499
customers’ fees and hearing deposits for
matters involving one arbitrator. The
text of the proposed rule change, as
amended, is available on the NYSE’s
Web site (https://www.NYSE.com), at the
NYSE’s principal office, and at the
Commission’s Public Reference Room.
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. The text of these
statements may be examined at the
places specified in Item IV below. The
NYSE 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 is proposing to amend
Rules 601 (Simplified Arbitration), 607
(Appointment of Arbitrators), 612
(Initiation of Proceedings), and 629
(Schedule of Fees). As described in
more detail below, the proposed
amendments would provide that all
arbitration matters involving customers
or non-members not exceeding $25,000
would be resolved on the papers (i.e.,
without a hearing) by one public
arbitrator or, upon request of the
customer or non-member, by one
securities industry arbitrator. The
customer or non-member also could
demand or consent to a hearing for
matters not exceeding $25,000.
In addition, all arbitration matters
involving customers or non-members
exceeding $25,000, but not exceeding
$200,000 (excluding costs and interest),
would be heard by one public arbitrator
at a hearing, unless the customer or nonmember requests that the matter be
heard by one securities industry
arbitrator. The proposed amendments
would clarify that, to the extent the
rules provide for a choice in panel
composition or method of arbitrator
appointment, the customer’s choice
prevails.5 Finally, the proposed
amendments also would reduce several
fees and hearing deposits for matters
heard by one arbitrator.
5 In arbitration matters involving non-members
and members, but not customers, the non-member’s
choice prevails. See NYSE Rules 607(a)(1) and
607(c)(2)(i)(a)–(b).
E:\FR\FM\29DEN1.SGM
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78500
Federal Register / Vol. 71, No. 250 / Friday, December 29, 2006 / Notices
pwalker on PROD1PC69 with NOTICES
Simplified Arbitration
NYSE Rule 601 currently provides
that any dispute, claim or controversy
between a customer and an associated
person or a member not exceeding
$25,000 is resolved by one public
arbitrator on the papers, unless the
customer requests or consents to a
hearing, or the arbitrator calls a
hearing.6 If the respondent files a
related counterclaim exceeding $25,000,
the arbitrator may refer the claim,
counterclaim and/or a third-party claim
to a panel of three arbitrators.7 The
arbitrator also may dismiss the
counterclaim and/or third-party claim,
without prejudice to the
counterclaimants and/or third-party
claimants pursuing their claims in a
separate proceeding.
The proposal would amend NYSE
Rules 601(a) and 601(f) to provide that
all arbitration matters involving
customers or non-members not
exceeding $25,000 would be resolved by
one public arbitrator on the papers,
unless the customer or non-member
demands or consents to a hearing, or the
arbitrator calls a hearing. The proposed
amendments to NYSE Rule 601(f) also
would clarify that the customer or nonmember may request that the matter be
resolved by one securities industry
arbitrator.
The proposal also would amend
NYSE Rule 601(d)(2) to provide that if
the respondent files a related
counterclaim or third-party claim
exceeding $25,000 but not exceeding
$200,000, any party or the arbitrator
may request a hearing before one
arbitrator. If the respondent files a
related counterclaim or third-party
claim exceeding $200,000, the proposed
amendments to NYSE Rule 601(d)(2)
would provide that the arbitrator may
refer the claim, counterclaim and/or
third-party claim to a panel of three
arbitrators pursuant to NYSE Rule 607.
Under the proposed amendments to
Rule 601(d)(2), the arbitrator also may
dismiss the counterclaim and/or thirdparty claim, without prejudice to the
counterclaimants and/or third-party
claimants pursuing their claims in a
separate proceeding.
The proposed amendments to the
‘‘Fees for Simplified Arbitration,
Industry as Claimant’’ Schedule in
NYSE Rule 601 would reduce the
hearing deposit that members, member
firms, member corporations, or allied
members and non-members pay for
claims not exceeding $25,000.
Specifically, the proposed amendments
6 NYSE
7 NYSE
Rule 601(f).
Rule 601(d).
VerDate Aug<31>2005
18:15 Dec 28, 2006
would reduce the hearing deposit from
$600 to $450 when the industry is a
claimant and the decision is made after
a hearing. The filing fee ($500) and fee
for a decision on the papers ($300)
would not be changed under the
proposal.
Appointment of Arbitrators
NYSE Rule 607(a)(1) currently
provides that in all matters involving
customers or non-members where the
matter in controversy exceeds $25,000
or where the matter in controversy does
not involve or disclose a money claim,
the Director of Arbitration appoints a
panel of three arbitrators, a majority of
whom are public, unless the customer
or non-member requests that a majority
be from the securities industry. The
proposed amendments to NYSE Rule
607(a)(1)(i) would provide that all
arbitration matters involving customers
or non-members where the matter in
controversy exceeds $25,000, but does
not exceed $200,000 (excluding costs
and interest), would be heard by one
public arbitrator, unless the customer or
non-member requests a securities
industry arbitrator.
Under the proposed amendments to
NYSE Rule 607(a)(1)(ii), all arbitration
matters involving customers or nonmembers where the matter in
controversy exceeds $200,000 would be
heard by three arbitrators, a majority of
whom would be public, unless the
customer or non-member requests that a
majority be from the securities industry.
The proposed amendments also
would add a new paragraph (2) to NYSE
Rule 607(b) which would clarify that, in
all arbitration matters involving
customers or non-members, to the
extent the NYSE arbitration rules
provide for a choice in panel
composition or method of arbitrator
appointment, the customer’s choice
would prevail.8
Initiation of Proceedings
Current NYSE Rule 612 sets forth the
procedures for initiating a customer or
non-member arbitration proceeding that
is not being filed under NYSE Rule 601,
which governs Simplified Arbitration.
The proposed amendments to NYSE
Rule 612 are intended to conform that
rule with the proposed changes to NYSE
Rules 601 and 607. In particular, the
proposed amendments to NYSE Rule
612(c)(1) would provide that in matters
exceeding $25,000, but not exceeding
$200,000, if the respondent(s) files a
related counterclaim, third-party claim,
or cross-claim exceeding $200,000, the
arbitrator may refer the claim,
8 See
Jkt 211001
PO 00000
footnote 5.
Frm 00106
Fmt 4703
Sfmt 4703
counterclaim, third-party claim, and/or
cross-claim, to a panel of three
arbitrators in accordance with Rule 607.
The arbitrator also may dismiss the
counterclaim, third-party claim, and/or
cross-claim without prejudice to the
counterclaimants, third-party claimants,
and/or cross-claimants pursuing their
claims in a separate proceeding
pursuant to the proposed amendments
to NYSE Rule 612(c)(1).
Schedule of Fees
NYSE Rule 629 sets forth the required
fees and hearing deposits for
arbitrations in the NYSE arbitration
forum. The proposed amendments to
NYSE Rule 629 would reduce the fees
and hearing deposits that customers,
members, and non-members pay for
claims exceeding $25,000 and not
exceeding $200,000, to reflect the
reduced costs associated with a hearing
by one arbitrator, rather than three. The
proposed amendments to the schedules
contained in NYSE Rules 629(c)(1)–(2)
and 629(i) would reduce the hearing
deposits to $450 from a maximum of
$750 under the existing rule.
In Amendment No. 1, the NYSE stated
that it is proposing to reduce fees and
hearing deposits because the costs of
administering an arbitration matter with
one arbitrator is less than the costs
associated with three arbitrators. In
cases with one arbitrator, the proposed
fees and hearing deposits are based on
either the current hearing deposit or the
fee charged for a pre-hearing conference
with one arbitrator, whichever is less.
The NYSE also notes in Amendment
No. 1 that the costs associated with a
pre-hearing conference, generally
conducted either on the papers
submitted or by telephone, are less than
those associated with an in-person
hearing.
In Amendment No. 1, the NYSE stated
that the proposed fees and hearing
deposits are intended to permit the
NYSE to recover some of its direct,
actual costs of administering arbitration
cases. The NYSE further stated that
those direct, actual costs are attributable
in part to arbitrator compensation and
travel expenses, court reporters and
(when a hearing takes place outside
New York) conference rooms. The NYSE
also stated in Amendment No. 1 that
under the proposed rule changes, the
actual costs it bears for administering
arbitration hearings involving a single
arbitrator would remain greater than
fees paid by customers or non-members.
Statutory Basis
The NYSE stated that it believes that
the proposed rule change is consistent
E:\FR\FM\29DEN1.SGM
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Federal Register / Vol. 71, No. 250 / Friday, December 29, 2006 / Notices
with Section 6(b)(4) 9 of the Act
requiring exchanges to have rules that
provide for the equitable allocation of
reasonable dues, fees, and other charges
among its members and other persons
using its facilities, and Section 6(b)(5) 10
of the Act requiring exchanges to have
rules designed to protect investors and
the public interest.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The NYSE does not believe that the
proposed rule change will impose any
burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act.
The NYSE 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
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 the proposed
rule change, or
(B) Institute proceedings to determine
whether the proposed rule change
should be disapproved.
pwalker on PROD1PC69 with NOTICES
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. The proposed rule change, as
amended, is based on, but not identical
to, the Uniform Code of Arbitration
(‘‘SICA Uniform Code’’) adopted by the
Securities Industry Conference on
Arbitration (‘‘SICA’’).
The Commission requests comments
on the differences between the NYSE
proposal and the SICA Uniform Code. In
particular, under SICA Uniform Code
Section 16(a), one arbitrator hears
claims up to $100,000; whereas the
NYSE proposes that one arbitrator
would hear claims not exceeding
$200,000. Should NYSE’s proposed rule
U.S.C. 78f(b)(4).
U.S.C. 78f(b)(5).
10 15
VerDate Aug<31>2005
18:15 Dec 28, 2006
Jkt 211001
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2006–61 on the
subject line.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
9 15
be consistent with the SICA Uniform
Code and only permit matters to be
resolved by one arbitrator if they
involve claims of $100,000 or less? In
the alternative, should customers or
non-members be able to request one
arbitrator for claims exceeding
$200,000? In addition, the SICA
Uniform Code does not contain
provisions similar to the amendments
proposed to NYSE Rules 601(d)(2) and
612(c)(1), as discussed above
Comments may be submitted by any
of the following methods:
78501
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6–22401 Filed 12–28–06; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–54997; File No. SR–
NYSEArca–2006–77]
Self-Regulatory Organizations; NYSE
Arca, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change To Reflect the Trading
Sessions and Trading Halt Procedures
for Certain Securities Trading on NYSE
Arca, LLC
December 21, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
Paper Comments
notice is hereby given that on December
• Send paper comments in triplicate
20, 2006, NYSE Arca, Inc. (‘‘NYSE
Arca’’ or ‘‘Exchange’’) through its
to Nancy M. Morris, Secretary,
wholly owned subsidiary NYSE Arca
Securities and Exchange Commission,
Equities, Inc. (‘‘NYSE Arca Equities’’),
100 F Street, NE., Washington, DC
filed with the Securities and Exchange
20549–1090.
Commission (‘‘Commission’’) the
All submissions should refer to File
proposed rule change as described in
Number SR–NYSE–2006–61. This file
Items I and II below, which Items have
number should be included on the
been substantially prepared by the
subject line if e-mail is used. To help the
Exchange. The Exchange filed the
Commission process and review your
proposal pursuant to Section 19(b)(3)(A)
comments more efficiently, please use
of the Act 3 and Rule 19b–4(f)(6)
only one method. The Commission will thereunder,4 which renders the proposal
post all comments on the Commission’s effective upon filing with the
Internet Web site (https://www.sec.gov/
Commission.
rules/sro/shtml). Copies of the
I. Self-Regulatory Organization’s
submission, all subsequent
Statement of the Terms of Substance of
amendments, all written statements
the Proposed Rule Change
with respect to the proposed rule
change that are filed with the
The Exchange, through NYSE Arca
Commission, and all written
Equities, is proposing to amend NYSE
communications relating to the
Arca Equities Rule 7.34 to reflect the
proposed rule change between the
trading sessions during which certain
Commission and any person, other than securities are eligible to trade on NYSE
Arca, LLC (‘‘NYSE Arca Marketplace’’),
those that may be withheld from the
the equities facility of NYSE Arca
public in accordance with the
Equities, and to provide that the
provisions of 5 U.S.C. 552, will be
Exchange shall maintain a list on its
available for inspection and copying in
Internet Web site that identifies all
the Commission’s Public Reference
Room. Copies of such filing also will be securities traded on the NYSE Arca
Marketplace that do not trade for the
available for inspection and copying at
duration of each of the three trading
the principal office of the NYSE. All
sessions specified in this rule. The text
comments received will be posted
of the proposed rule change is available
without change; the Commission does
on the Exchange’s Web site (https://
not edit personal identifying
www.nysearca.com/regulations/rules),
information from submissions. You
should submit only information that
11 17 CFR 200.30–3(a)(12).
you wish to make available publicly. All
1 15 U.S.C. 78s(b)(1).
submissions should refer to File number
2 17 CFR 240.19b–4.
SR–NYSE–2006–61 and should be
3 15 U.S.C. 78s(b)(3)(A).
submitted on or before January 19, 2007.
4 17 CFR 240.19b–4(f)(6).
PO 00000
Frm 00107
Fmt 4703
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E:\FR\FM\29DEN1.SGM
29DEN1
Agencies
[Federal Register Volume 71, Number 250 (Friday, December 29, 2006)]
[Notices]
[Pages 78499-78501]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-22401]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-54982; File No. SR-NYSE-2006-61]
Self-Regulatory Organizations; New York Stock Exchange LLC;
Notice of Filing of Proposed Changes and Amendment No. 1 thereto to
Rules 601, 607, 612 and 629 Relating to Single Arbitrators for Claims
not Exceeding $200,000
December 20, 2006.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act''),\1\ and Rule 19b-4 \2\ thereunder, notice is hereby given
that on July 13, 2006, the New York Stock Exchange LLC (``NYSE'' or the
``Exchange'') 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 NYSE. On December
19, 2006, the NYSE filed Amendment No. 1 to the proposed rule change
(``Amendment No. 1'').\3\ The Commission is publishing this notice to
solicit comments on the proposed rule change, as amended, from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, which supplemented the original filing,
the Exchange provided more information regarding the proposed
amendments to certain arbitration fees and hearing deposits, and
clarified certain aspects of the rule filing.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Under the proposed rule change, matters in controversy involving
customer or non-member claims not exceeding $200,000 (excluding costs
and interest) would be decided by one public arbitrator, unless the
customer or non-member requests that the matter be decided by one
securities industry arbitrator.\4\ In addition, the proposed rule
change would reduce several customers' fees and hearing deposits for
matters involving one arbitrator. The text of the proposed rule change,
as amended, is available on the NYSE's Web site (https://www.NYSE.com),
at the NYSE's principal office, and at the Commission's Public
Reference Room.
---------------------------------------------------------------------------
\4\ NYSE stated that approximately one-third of NYSE arbitration
matters since 2002 have involved claims of less than $200,000.
Telephone conversation among Karen Kupersmith, Director of
Arbitration, NYSE; Lourdes Gonzalez, Assistant Chief Counsel--Sales
Practices, Commission; and Michael Hershaft, Special Counsel,
Commission (Dec. 20, 2006).
---------------------------------------------------------------------------
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. The
text of these statements may be examined at the places specified in
Item IV below. The NYSE 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 is proposing to amend Rules 601 (Simplified Arbitration),
607 (Appointment of Arbitrators), 612 (Initiation of Proceedings), and
629 (Schedule of Fees). As described in more detail below, the proposed
amendments would provide that all arbitration matters involving
customers or non-members not exceeding $25,000 would be resolved on the
papers (i.e., without a hearing) by one public arbitrator or, upon
request of the customer or non-member, by one securities industry
arbitrator. The customer or non-member also could demand or consent to
a hearing for matters not exceeding $25,000.
In addition, all arbitration matters involving customers or non-
members exceeding $25,000, but not exceeding $200,000 (excluding costs
and interest), would be heard by one public arbitrator at a hearing,
unless the customer or non-member requests that the matter be heard by
one securities industry arbitrator. The proposed amendments would
clarify that, to the extent the rules provide for a choice in panel
composition or method of arbitrator appointment, the customer's choice
prevails.\5\ Finally, the proposed amendments also would reduce several
fees and hearing deposits for matters heard by one arbitrator.
---------------------------------------------------------------------------
\5\ In arbitration matters involving non-members and members,
but not customers, the non-member's choice prevails. See NYSE Rules
607(a)(1) and 607(c)(2)(i)(a)-(b).
---------------------------------------------------------------------------
[[Page 78500]]
Simplified Arbitration
NYSE Rule 601 currently provides that any dispute, claim or
controversy between a customer and an associated person or a member not
exceeding $25,000 is resolved by one public arbitrator on the papers,
unless the customer requests or consents to a hearing, or the
arbitrator calls a hearing.\6\ If the respondent files a related
counterclaim exceeding $25,000, the arbitrator may refer the claim,
counterclaim and/or a third-party claim to a panel of three
arbitrators.\7\ The arbitrator also may dismiss the counterclaim and/or
third-party claim, without prejudice to the counterclaimants and/or
third-party claimants pursuing their claims in a separate proceeding.
---------------------------------------------------------------------------
\6\ NYSE Rule 601(f).
\7\ NYSE Rule 601(d).
---------------------------------------------------------------------------
The proposal would amend NYSE Rules 601(a) and 601(f) to provide
that all arbitration matters involving customers or non-members not
exceeding $25,000 would be resolved by one public arbitrator on the
papers, unless the customer or non-member demands or consents to a
hearing, or the arbitrator calls a hearing. The proposed amendments to
NYSE Rule 601(f) also would clarify that the customer or non-member may
request that the matter be resolved by one securities industry
arbitrator.
The proposal also would amend NYSE Rule 601(d)(2) to provide that
if the respondent files a related counterclaim or third-party claim
exceeding $25,000 but not exceeding $200,000, any party or the
arbitrator may request a hearing before one arbitrator. If the
respondent files a related counterclaim or third-party claim exceeding
$200,000, the proposed amendments to NYSE Rule 601(d)(2) would provide
that the arbitrator may refer the claim, counterclaim and/or third-
party claim to a panel of three arbitrators pursuant to NYSE Rule 607.
Under the proposed amendments to Rule 601(d)(2), the arbitrator also
may dismiss the counterclaim and/or third-party claim, without
prejudice to the counterclaimants and/or third-party claimants pursuing
their claims in a separate proceeding.
The proposed amendments to the ``Fees for Simplified Arbitration,
Industry as Claimant'' Schedule in NYSE Rule 601 would reduce the
hearing deposit that members, member firms, member corporations, or
allied members and non-members pay for claims not exceeding $25,000.
Specifically, the proposed amendments would reduce the hearing deposit
from $600 to $450 when the industry is a claimant and the decision is
made after a hearing. The filing fee ($500) and fee for a decision on
the papers ($300) would not be changed under the proposal.
Appointment of Arbitrators
NYSE Rule 607(a)(1) currently provides that in all matters
involving customers or non-members where the matter in controversy
exceeds $25,000 or where the matter in controversy does not involve or
disclose a money claim, the Director of Arbitration appoints a panel of
three arbitrators, a majority of whom are public, unless the customer
or non-member requests that a majority be from the securities industry.
The proposed amendments to NYSE Rule 607(a)(1)(i) would provide that
all arbitration matters involving customers or non-members where the
matter in controversy exceeds $25,000, but does not exceed $200,000
(excluding costs and interest), would be heard by one public
arbitrator, unless the customer or non-member requests a securities
industry arbitrator.
Under the proposed amendments to NYSE Rule 607(a)(1)(ii), all
arbitration matters involving customers or non-members where the matter
in controversy exceeds $200,000 would be heard by three arbitrators, a
majority of whom would be public, unless the customer or non-member
requests that a majority be from the securities industry.
The proposed amendments also would add a new paragraph (2) to NYSE
Rule 607(b) which would clarify that, in all arbitration matters
involving customers or non-members, to the extent the NYSE arbitration
rules provide for a choice in panel composition or method of arbitrator
appointment, the customer's choice would prevail.\8\
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\8\ See footnote 5.
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Initiation of Proceedings
Current NYSE Rule 612 sets forth the procedures for initiating a
customer or non-member arbitration proceeding that is not being filed
under NYSE Rule 601, which governs Simplified Arbitration. The proposed
amendments to NYSE Rule 612 are intended to conform that rule with the
proposed changes to NYSE Rules 601 and 607. In particular, the proposed
amendments to NYSE Rule 612(c)(1) would provide that in matters
exceeding $25,000, but not exceeding $200,000, if the respondent(s)
files a related counterclaim, third-party claim, or cross-claim
exceeding $200,000, the arbitrator may refer the claim, counterclaim,
third-party claim, and/or cross-claim, to a panel of three arbitrators
in accordance with Rule 607. The arbitrator also may dismiss the
counterclaim, third-party claim, and/or cross-claim without prejudice
to the counterclaimants, third-party claimants, and/or cross-claimants
pursuing their claims in a separate proceeding pursuant to the proposed
amendments to NYSE Rule 612(c)(1).
Schedule of Fees
NYSE Rule 629 sets forth the required fees and hearing deposits for
arbitrations in the NYSE arbitration forum. The proposed amendments to
NYSE Rule 629 would reduce the fees and hearing deposits that
customers, members, and non-members pay for claims exceeding $25,000
and not exceeding $200,000, to reflect the reduced costs associated
with a hearing by one arbitrator, rather than three. The proposed
amendments to the schedules contained in NYSE Rules 629(c)(1)-(2) and
629(i) would reduce the hearing deposits to $450 from a maximum of $750
under the existing rule.
In Amendment No. 1, the NYSE stated that it is proposing to reduce
fees and hearing deposits because the costs of administering an
arbitration matter with one arbitrator is less than the costs
associated with three arbitrators. In cases with one arbitrator, the
proposed fees and hearing deposits are based on either the current
hearing deposit or the fee charged for a pre-hearing conference with
one arbitrator, whichever is less. The NYSE also notes in Amendment No.
1 that the costs associated with a pre-hearing conference, generally
conducted either on the papers submitted or by telephone, are less than
those associated with an in-person hearing.
In Amendment No. 1, the NYSE stated that the proposed fees and
hearing deposits are intended to permit the NYSE to recover some of its
direct, actual costs of administering arbitration cases. The NYSE
further stated that those direct, actual costs are attributable in part
to arbitrator compensation and travel expenses, court reporters and
(when a hearing takes place outside New York) conference rooms. The
NYSE also stated in Amendment No. 1 that under the proposed rule
changes, the actual costs it bears for administering arbitration
hearings involving a single arbitrator would remain greater than fees
paid by customers or non-members.
Statutory Basis
The NYSE stated that it believes that the proposed rule change is
consistent
[[Page 78501]]
with Section 6(b)(4) \9\ of the Act requiring exchanges to have rules
that provide for the equitable allocation of reasonable dues, fees, and
other charges among its members and other persons using its facilities,
and Section 6(b)(5) \10\ of the Act requiring exchanges to have rules
designed to protect investors and the public interest.
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\9\ 15 U.S.C. 78f(b)(4).
\10\ 15 U.S.C. 78f(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
The NYSE does not believe that the proposed rule change will 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 NYSE 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
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 the 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. The proposed rule
change, as amended, is based on, but not identical to, the Uniform Code
of Arbitration (``SICA Uniform Code'') adopted by the Securities
Industry Conference on Arbitration (``SICA'').
The Commission requests comments on the differences between the
NYSE proposal and the SICA Uniform Code. In particular, under SICA
Uniform Code Section 16(a), one arbitrator hears claims up to $100,000;
whereas the NYSE proposes that one arbitrator would hear claims not
exceeding $200,000. Should NYSE's proposed rule be consistent with the
SICA Uniform Code and only permit matters to be resolved by one
arbitrator if they involve claims of $100,000 or less? In the
alternative, should customers or non-members be able to request one
arbitrator for claims exceeding $200,000? In addition, the SICA Uniform
Code does not contain provisions similar to the amendments proposed to
NYSE Rules 601(d)(2) and 612(c)(1), as discussed above
Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send e-mail to rule-comments@sec.gov. Please include File
Number SR-NYSE-2006-61 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSE-2006-61. 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 (https://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. 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-2006-61 and should be submitted on or before
January 19, 2007.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Florence E. Harmon,
Deputy Secretary.
[FR Doc. E6-22401 Filed 12-28-06; 8:45 am]
BILLING CODE 8011-01-P