Self-Regulatory Organizations; Notice of Filing and Immediate Effectiveness of Proposed Rule Change by the National Stock Exchange Relating to the Exchange's Regulatory Transaction Fee, 19547-19549 [E5-1744]
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Federal Register / Vol. 70, No. 70 / Wednesday, April 13, 2005 / Notices
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–NASD–2005–035 and
should be submitted on or before May
4, 2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–1747 Filed 4–12–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–51478; File No. SR–NSX–
2005–01]
Self-Regulatory Organizations; Notice
of Filing and Immediate Effectiveness
of Proposed Rule Change by the
National Stock Exchange Relating to
the Exchange’s Regulatory
Transaction Fee
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 31,
2005, the National Stock ExchangeSM
(‘‘NSX’’ or ‘‘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 NSX. The Exchange filed
this proposal pursuant to Section
19(b)(3)(A) 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.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NSX proposes to amend Exchange
Rule 11.10(A)(q), which pertains to the
transaction fee that NSX assesses to
members and uses to help fund the
Exchange’s fee obligations to the
Commission under Section 31 of the
Act.5 NSX proposes to amend the title
and text of the rule to make clear the
distinction between the Exchange’s
11 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
5 15 U.S.C. 78ee.
1 15
VerDate jul<14>2003
18:37 Apr 12, 2005
Section 31 fee obligations and the
transaction fee the Exchange assesses
members to fund those obligations, and
to amend the text to explicitly reference
that the NSX Rule 11.10(A)(q) fee will
change in tandem with Section 31 rate
changes announced by the Commission.
Proposed new language is underlined.
Proposed deletions are in brackets.
*
*
*
*
*
RULES OF NATIONAL STOCK
EXCHANGE
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. NSX 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
Section 31 of the Act requires NSX,
CHAPTER XI
other national securities exchanges, and
Trading Rules
NASD to pay transaction fees and
assessments to the Commission that are
*
*
*
*
*
designed to recover the costs related to
Rule 11.10 National Securities
the government’s supervision and
Trading System Fees
regulation of the securities markets and
A. Trading Fees
securities professionals. On June 28,
(a)–(p) No change.
2004, the Commission established new
(q) [SEC]Regulatory Transaction Fee.
procedures governing the calculation,
[-] Under Section 31 of the Act, the
payment, and collection of fees and
Exchange must pay certain fees to the
assessments on securities transactions
Commission. To help fund the
owed by national securities exchanges
Exchange’s obligations to the
and national securities associations
Commission under Section 31, this
pursuant to Section 31 of the Act.6 The
Regulatory Transaction Fee is assessed
new procedures became effective
to members. To the extent there may be
August 6, 2004. In accordance with the
any excess monies collected under this
new procedures, NSX must now provide
Rule, the Exchange may retain those
the Commission with trade data on
monies to help fund its general
covered sales 7 occurring on the
operating expense. Each member
Exchange, which the Commission uses
engaged in executing transactions on the to calculate the amount of fees due from
Exchange shall pay, in such manner and NSX. Accordingly, the calculation of
at such times as [the Treasurer of] the
fees owed by NSX pursuant to Section
Exchange shall direct, a Regulatory
31 of the Act is now performed by the
Transaction F[f]ee equal to [1/300th of
Commission.
one percent of the aggregate dollar
To recover the costs of NSX’s Section
amount] (i) the rate determined by the
31 obligation, NSX assesses a
Commission to be applicable to covered transaction fee on its members under
sales occurring on the Exchange in
Exchange Rule 11.10(A)(q). The
accordance with Section 31 of the Act
Exchange has determined to modify the
[of the sales on the Exchange] multiplied text of Exchange Rule 11.10(A)(q) in
by (ii) the member’s aggregate dollar
response to statements made by the
amount of covered sales occurring on
Commission in its Adopting Release
the Exchange during any computational that ‘‘it is misleading to suggest that a
period [of such securities (other than
customer or [a self-regulatory
bonds, debentures and other evidences
organization] member incurs an
of indebtedness and any sale or any
obligation to the Commission under
class of sales of securities which the
Section 31.’’ 8 While NSX notes that it
Securities and Exchange Commission
6 See Securities Exchange Act Release No. 49928
may, by rule, exempt from the
imposition of the fee ) executed by such (June 28, 2004), 69 FR 41060 (July 7, 2004)
(‘‘Adopting Release’’).
member].
7 ‘‘Covered sale’’ means ‘‘a sale of a security, other
(r) No change.
than an exempt sale or a sale of a security future,
occurring on a national securities exchange or by
B. No change.
or through any member of a national securities
C. No change.
*
*
*
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NSX included statements concerning
the purpose of and basis for the
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19547
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association otherwise than on a national securities
exchange.’’ 17 CFR 240.31(a)(6).
8 See Adopting Release, 69 FR at 41072. The
Exchange has also reviewed the rounding
convention it had previously utilized in assessing
the NSX Rule 11.10(A)(q) fee to its members. Prior
to that review, the Exchange calculated the fee
based on the sell-side value per trade multiplied by
the Commission’s current rate. This number was
E:\FR\FM\13APN1.SGM
Continued
13APN1
19548
Federal Register / Vol. 70, No. 70 / Wednesday, April 13, 2005 / Notices
has previously filed amendments
Exchange Rule 11.10(A)(q) with the
Commission,9 to avoid any possible
confusion as discussed in the Adopting
Release, the Exchange is revising the
title and text of Exchange Rule
11.10(A)(q). Specifically, in conformity
with the Adopting Release, NSX is
changing the name of the rule and
related references from ‘‘SEC Fee’’ to
‘‘Regulatory Transaction Fee.’’ The rule
is also being amended to make clear
that, to the extent the Exchange may
collect more from members under
Exchange Rule 11.10(A)(q) than is due
from the Exchange to the Commission
under Section 31 of the Act for covered
sales occurring on the Exchange, for
example due to rounding differences,
the excess monies collected may be
used by the Exchange to fund its general
operating expense. The Exchange is also
revising the text to explicitly reference
that the Regulatory Transaction Fee rate
applicable to each member’s aggregate
amount of covered sales occurring on
the Exchange will continue to be set, as
it is today, in accordance with Section
31 of the Act.10
Though the requirements of Section
31 of the Act, including the new
procedures established by the
Commission, apply directly to NSX and
other self-regulatory organizations, and
then rounded, and the rounded amount for each of
the member’s monthly sell-side transactions was
then added up to arrive at the total amount due
from the member for a given month. The Exchange
then used the monies collected to fund the
Exchange’s payment of the amount due the
Commission under Section 31 of the Act. After its
review and after consultation with the Commission
staff, the Exchange has determined to round the
applicable fees due on a per-member basis and not
on a per-transaction basis and announced this
change in rounding convention to its membership
through a regulatory circular. See NSX Regulatory
Circular 04–11. As of August 2, 2004, the fee is now
calculated based on each member’s overall sell-side
transaction value multiplied by the Commission’s
applicable Section 31 fee rate.
9 See, e.g., Securities Exchange Act Release No.
37586 (August 20, 1996), 61 FR 45467 (August 29,
1996) (notice of filing and immediate effectiveness
of File No. SR–CSE–96–04). The Exchange recently
changed its name and was formerly known as the
Cincinnati Stock Exchange or ‘‘CSE.’’ See Securities
Exchange Act Release No. 48774 (November 12,
2003), 68 FR 65332 (November 19, 2003) (notice of
filing and immediate effectiveness of File No. SR–
CSE–2003–12).
10 The Exchange is also amending Rule
11.10(A)(q) to reflect that the applicable fee rate is
periodically adjusted in accordance with Section
31. In the past, NSX has notified members, through
regulatory circulars and other means, of any
periodic adjustments to the fee rate made by the
Commission. NSX will continue to notify members
of any such adjustments in the future since NSX
seeks to recover the costs of its Section 31
obligation from its members. Because these
amendments are similar to those proposed in
another rule proposal pending with the
Commission, File No. SR–CSE–2003–07, the
Exchange plans to file amendment 3 to File No. SR–
CSE–2003–07 to reflect these revisions.
VerDate jul<14>2003
18:37 Apr 12, 2005
Jkt 205001
not their membership, the requirements
will affect the obligations of members
under Exchange Rule 11.10(A)(q).
Therefore, NSX has issued a Regulatory
Circular to inform members of the new
procedures relating to Section 31 of the
Act to remind members of their
continuing obligation to pay the
transaction fees assessed by NSX
pursuant to Exchange Rule 11.10(A)(q)
so that it can recover the costs of its
Section 31 obligation, and to clarify the
manner in which the Exchange would
use rounding to calculate each
member’s applicable NSX Rule
11.10(A)(q) fee.11
2. Statutory Basis
The Exchange believes that the
proposed rule change is consistent with
Section 6(b) of the Act,12 in general, and
furthers the objectives of Section 6(b)(4)
of the Act,13 in particular, in that it
provides for the equitable allocation of
dues, fees, and other charges among its
members.
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 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 were neither solicited nor
received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change
has become immediately effective
pursuant to Section 19(b)(3)(A)(ii) of the
Act 14 and subparagraph (f)(2) of Rule
19b–4 thereunder,15 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 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.
11 See NSX Regulatory Circular 04–011 (August 2,
2004).
12 15 U.S.C. 78f(b).
13 15 U.S.C. 78f(b)(4).
14 15 U.S.C. 78s(b)(3)(A)(ii).
15 17 CFR 240.19b–4(f)(2).
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Sfmt 4703
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 (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NSX–2005–01 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–NSX–2005–01. 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
Section, 450 Fifth Street, NW.,
Washington, DC 20549. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. 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–NSX–
2005–01 and should be submitted on or
before May 4, 2005.
E:\FR\FM\13APN1.SGM
13APN1
Federal Register / Vol. 70, No. 70 / Wednesday, April 13, 2005 / Notices
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.16
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–1744 Filed 4–12–05; 8:45 am]
145 of February 4, 1980, as amended,
and (2) the Delegation of Authority to
the Global AIDS Coordinator of
November 17, 2004.
This delegation shall be published in
the Federal Register.
BILLING CODE 8010–01–P
Dated: December 22, 2004.
Richard L. Armitage,
Deputy Secretary of State, Department of
State.
DEPARTMENT OF STATE
[Delegation of Authority No. 145–19]
Delegation of Authority to the Global
AIDS Coordinator Under the United
States Leadership Against HIV/AIDS,
Tuberculosis, and Malaria Act of 2003
(Superseding Delegation of Authority
145–18 and Delegation No. 279)
By virtue of the authority vested in
me by the laws of the United States
including by the Foreign Assistance Act
of 1961, as amended (22 U.S.C. 2151 et
seq.), section 1 of the State Department
Basic Authorities Act of 1956, as
amended (22 U.S.C. 2651a), Executive
Order 12163, as amended, including by
Executive Order 13361 of November 16,
2004 (Assignment of Functions under
the United States Leadership Against
HIV/AIDS, Tuberculosis and Malaria
Act of 2003), and Delegation of
Authority Number 245 of April 23,
2001, State Department Delegation of
Authority No. 145 of February 4, 1980,
as amended, is hereby further amended
as follows:
Section 1. Section 1(p) is restated as
follows:
‘‘(p) To the Global AIDS Coordinator:
Those functions in the United States
Leadership Against HIV/AIDS, Tuberculosis,
and Malaria Act of 2003 (P.L. 108–25)(Act),
as amended, except amendments made by
that Act, that were conferred upon the
President and delegated to the Secretary of
State.’’
Section 2. Section 2(a) is amended in
paragraph (1) by adding before the
semicolon at the end the following:
‘‘: Provided, That the functions under
section 104A of the Act shall be exercised
subject to the authorities and duties of the
Global AIDS Coordinator as contained in
section 1(f) of the State Department Basic
Authorities Act of 1956’’.
Section 3. Notwithstanding any
provision of this Delegation of
Authority, the Secretary of State and the
Deputy Secretary of State may at any
time exercise any function delegated by
this delegation of authority.
Section 4. This delegation supersedes
(1) Delegation of Authority No. 145–18
of February 23, 2004, amending State
Department Delegation of Authority No.
16 17
CFR 200.30–3(a)(12).
VerDate jul<14>2003
18:37 Apr 12, 2005
Editorial Note: This document was
received at the Office of the Federal Register
on April 8, 2005.
[FR Doc. 05–7415 Filed 4–12–05; 8:45 am]
BILLING CODE 4710–10–P
DEPARTMENT OF STATE
[Delegation of Authority No. 279]
Delegation of Authority to the Global
AIDS Coordinator Under the United
States Leadership Against HIV/AIDS,
Tuberculosis, and Malaria Act of 2003
(Subsequently Superseded by
Delegation No. 145–19)
By virtue of the authority vested in
me as Deputy Secretary of State,
including the authority delegated to me
by the Secretary of State in Delegation
of Authority Number 245 of April 23,
2001, and by the Foreign Assistance Act
of 1961, as amended (22 U.S.C. 2151 et
seq.), and section 1 of the State
Department Basic Authorities Act of
1956, as amended (22 U.S.C. 2651a), I
hereby re-delegate the authorities
conferred upon the President by the
United States Leadership Against HIV/
AIDS, Tuberculosis, and Malaria Act of
2003 (Pub. L. 108–25) and delegated to
the Secretary of State pursuant to the
Executive Order of November 16, 2004,
(Assignment of Functions under the
United States Leadership Against HIV/
AIDS, Tuberculosis, and Malaria Act of
2003), amending Executive Order 12163
of September 29, 1979 (Administration
of Foreign Assistance and Related
Functions).
Notwithstanding any provision of this
Delegation of Authority, the Secretary of
State and the Deputy Secretary of State
may at any time exercise any function
delegated by this delegation of
authority.
This delegation shall be published in
the Federal Register.
Dated: November 17, 2004.
Richard L. Armitage,
Deputy Secretary of State, Department of
State.
Editorial Note: This document was
received at the Office of the Federal Register
on April 8, 2005.
[FR Doc. 05–7416 Filed 4–12–05; 8:45 am]
BILLING CODE 4710–10–P
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19549
DEPARTMENT OF TRANSPORTATION
[Docket No. OST–2004–19172]
Office of Small and Disadvantaged
Business Utilization; Notice of Request
for New Data Collection
Office of the Secretary, DOT.
Notice.
AGENCY:
ACTION:
SUMMARY: In accordance with the
Paperwork Reduction Act of 1995 (44
U.S.C. 3501 et seq.), this notice
announces that the Information
Collection Request (ICR) abstracted
below has been forwarded to the Office
of Management and Budget (OMB) for
approval and comment. The ICR
describes the nature of the information
collection and its expected cost and
burden. The Federal Register Notice
with a 60-day comment period soliciting
comments on the following collection of
information was published on December
30, 2004 [Volume 69, Number 250] and
January 7, 2005 [FR Vol. 70, No. 5, page
1501] (correction). No comments were
received.
Comments must be submitted on
or before May 13, 2005. A comment to
OMB is most effective if OMB receives
it within 30 days of publication.
ADDRESSES: You may submit comments
identified by DOT DMS Docket Number
OST–2004–19172 by the following
methods:
• Web site: https://dms.dot.gov.
Follow the instructions for submitting
comments on the DOT electronic docket
site.
• Fax 1–202–493–2251.
• Mail: Docket Management Facility;
U.S. Department of Transportation, 400
Seventh Street, SW, Nassif Building,
Room PL–401, Washington, DC 20590–
001.
• Hand Delivery: Room PL–401 on
plaza level of the Nassif Building, 400
Seventh Street, SW, Washington DC,
between 9 a.m. and 5 p.m., Monday
through Friday, except on Federal
holidays.
• Federal eRulemaking Portal: Go to
https://www.regulations.gov. Follow the
online instructions for submitting
comments.
Instructions: All submissions must
include the agency name and docket
number or Regulatory Identification
Number (RIN) for this rulemaking
process; Note that all comments
received will be posted without change
to https://dms.dot.gov including any
personal information provided. Please
see the Privacy Act heading under
Regulatory Notes.
Docket: For access to the docket to
read background documents or
DATES:
E:\FR\FM\13APN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 70 (Wednesday, April 13, 2005)]
[Notices]
[Pages 19547-19549]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-1744]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-51478; File No. SR-NSX-2005-01]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Stock Exchange
Relating to the Exchange's Regulatory Transaction Fee
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 31, 2005, the National Stock Exchange\SM\ (``NSX'' or
``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 NSX. The Exchange
filed this proposal pursuant to Section 19(b)(3)(A) 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.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NSX proposes to amend Exchange Rule 11.10(A)(q), which pertains to
the transaction fee that NSX assesses to members and uses to help fund
the Exchange's fee obligations to the Commission under Section 31 of
the Act.\5\ NSX proposes to amend the title and text of the rule to
make clear the distinction between the Exchange's Section 31 fee
obligations and the transaction fee the Exchange assesses members to
fund those obligations, and to amend the text to explicitly reference
that the NSX Rule 11.10(A)(q) fee will change in tandem with Section 31
rate changes announced by the Commission. Proposed new language is
underlined. Proposed deletions are in brackets.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78ee.
---------------------------------------------------------------------------
* * * * *
RULES OF NATIONAL STOCK EXCHANGE
* * * * *
CHAPTER XI
Trading Rules
* * * * *
Rule 11.10 National Securities Trading System Fees
A. Trading Fees
(a)-(p) No change.
(q) [SEC]Regulatory Transaction Fee. [-] Under Section 31 of the
Act, the Exchange must pay certain fees to the Commission. To help fund
the Exchange's obligations to the Commission under Section 31, this
Regulatory Transaction Fee is assessed to members. To the extent there
may be any excess monies collected under this Rule, the Exchange may
retain those monies to help fund its general operating expense. Each
member engaged in executing transactions on the Exchange shall pay, in
such manner and at such times as [the Treasurer of] the Exchange shall
direct, a Regulatory Transaction F[f]ee equal to [1/300th of one
percent of the aggregate dollar amount] (i) the rate determined by the
Commission to be applicable to covered sales occurring on the Exchange
in accordance with Section 31 of the Act [of the sales on the Exchange]
multiplied by (ii) the member's aggregate dollar amount of covered
sales occurring on the Exchange during any computational period [of
such securities (other than bonds, debentures and other evidences of
indebtedness and any sale or any class of sales of securities which the
Securities and Exchange Commission may, by rule, exempt from the
imposition of the fee ) executed by such member].
(r) No change.
B. No change.
C. No change.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NSX 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. NSX 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
Section 31 of the Act requires NSX, other national securities
exchanges, and NASD to pay transaction fees and assessments to the
Commission that are designed to recover the costs related to the
government's supervision and regulation of the securities markets and
securities professionals. On June 28, 2004, the Commission established
new procedures governing the calculation, payment, and collection of
fees and assessments on securities transactions owed by national
securities exchanges and national securities associations pursuant to
Section 31 of the Act.\6\ The new procedures became effective August 6,
2004. In accordance with the new procedures, NSX must now provide the
Commission with trade data on covered sales \7\ occurring on the
Exchange, which the Commission uses to calculate the amount of fees due
from NSX. Accordingly, the calculation of fees owed by NSX pursuant to
Section 31 of the Act is now performed by the Commission.
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 49928 (June 28,
2004), 69 FR 41060 (July 7, 2004) (``Adopting Release'').
\7\ ``Covered sale'' means ``a sale of a security, other than an
exempt sale or a sale of a security future, occurring on a national
securities exchange or by or through any member of a national
securities association otherwise than on a national securities
exchange.'' 17 CFR 240.31(a)(6).
---------------------------------------------------------------------------
To recover the costs of NSX's Section 31 obligation, NSX assesses a
transaction fee on its members under Exchange Rule 11.10(A)(q). The
Exchange has determined to modify the text of Exchange Rule 11.10(A)(q)
in response to statements made by the Commission in its Adopting
Release that ``it is misleading to suggest that a customer or [a self-
regulatory organization] member incurs an obligation to the Commission
under Section 31.'' \8\ While NSX notes that it
[[Page 19548]]
has previously filed amendments Exchange Rule 11.10(A)(q) with the
Commission,\9\ to avoid any possible confusion as discussed in the
Adopting Release, the Exchange is revising the title and text of
Exchange Rule 11.10(A)(q). Specifically, in conformity with the
Adopting Release, NSX is changing the name of the rule and related
references from ``SEC Fee'' to ``Regulatory Transaction Fee.'' The rule
is also being amended to make clear that, to the extent the Exchange
may collect more from members under Exchange Rule 11.10(A)(q) than is
due from the Exchange to the Commission under Section 31 of the Act for
covered sales occurring on the Exchange, for example due to rounding
differences, the excess monies collected may be used by the Exchange to
fund its general operating expense. The Exchange is also revising the
text to explicitly reference that the Regulatory Transaction Fee rate
applicable to each member's aggregate amount of covered sales occurring
on the Exchange will continue to be set, as it is today, in accordance
with Section 31 of the Act.\10\
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\8\ See Adopting Release, 69 FR at 41072. The Exchange has also
reviewed the rounding convention it had previously utilized in
assessing the NSX Rule 11.10(A)(q) fee to its members. Prior to that
review, the Exchange calculated the fee based on the sell-side value
per trade multiplied by the Commission's current rate. This number
was then rounded, and the rounded amount for each of the member's
monthly sell-side transactions was then added up to arrive at the
total amount due from the member for a given month. The Exchange
then used the monies collected to fund the Exchange's payment of the
amount due the Commission under Section 31 of the Act. After its
review and after consultation with the Commission staff, the
Exchange has determined to round the applicable fees due on a per-
member basis and not on a per-transaction basis and announced this
change in rounding convention to its membership through a regulatory
circular. See NSX Regulatory Circular 04-11. As of August 2, 2004,
the fee is now calculated based on each member's overall sell-side
transaction value multiplied by the Commission's applicable Section
31 fee rate.
\9\ See, e.g., Securities Exchange Act Release No. 37586 (August
20, 1996), 61 FR 45467 (August 29, 1996) (notice of filing and
immediate effectiveness of File No. SR-CSE-96-04). The Exchange
recently changed its name and was formerly known as the Cincinnati
Stock Exchange or ``CSE.'' See Securities Exchange Act Release No.
48774 (November 12, 2003), 68 FR 65332 (November 19, 2003) (notice
of filing and immediate effectiveness of File No. SR-CSE-2003-12).
\10\ The Exchange is also amending Rule 11.10(A)(q) to reflect
that the applicable fee rate is periodically adjusted in accordance
with Section 31. In the past, NSX has notified members, through
regulatory circulars and other means, of any periodic adjustments to
the fee rate made by the Commission. NSX will continue to notify
members of any such adjustments in the future since NSX seeks to
recover the costs of its Section 31 obligation from its members.
Because these amendments are similar to those proposed in another
rule proposal pending with the Commission, File No. SR-CSE-2003-07,
the Exchange plans to file amendment 3 to File No. SR-CSE-2003-07 to
reflect these revisions.
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Though the requirements of Section 31 of the Act, including the new
procedures established by the Commission, apply directly to NSX and
other self-regulatory organizations, and not their membership, the
requirements will affect the obligations of members under Exchange Rule
11.10(A)(q). Therefore, NSX has issued a Regulatory Circular to inform
members of the new procedures relating to Section 31 of the Act to
remind members of their continuing obligation to pay the transaction
fees assessed by NSX pursuant to Exchange Rule 11.10(A)(q) so that it
can recover the costs of its Section 31 obligation, and to clarify the
manner in which the Exchange would use rounding to calculate each
member's applicable NSX Rule 11.10(A)(q) fee.\11\
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\11\ See NSX Regulatory Circular 04-011 (August 2, 2004).
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2. Statutory Basis
The Exchange believes that the proposed rule change is consistent
with Section 6(b) of the Act,\12\ in general, and furthers the
objectives of Section 6(b)(4) of the Act,\13\ in particular, in that it
provides for the equitable allocation of dues, fees, and other charges
among its members.
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\12\ 15 U.S.C. 78f(b).
\13\ 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 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 were neither solicited
nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing proposed rule change has become immediately effective
pursuant to Section 19(b)(3)(A)(ii) of the Act \14\ and subparagraph
(f)(2) of Rule 19b-4 thereunder,\15\ 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 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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\14\ 15 U.S.C. 78s(b)(3)(A)(ii).
\15\ 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 (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NSX-2005-01 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-NSX-2005-01. 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 Section, 450 Fifth
Street, NW., Washington, DC 20549. Copies of such filing also will be
available for inspection and copying at the principal office of the
Exchange. 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-NSX-
2005-01 and should be submitted on or before May 4, 2005.
[[Page 19549]]
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-1744 Filed 4-12-05; 8:45 am]
BILLING CODE 8010-01-P
