Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendments No. 1 and No. 2 Thereto Relating to Honorarium for Arbitrators Deciding Discovery-Related Motions, 28972-28973 [E5-2506]

Download as PDF 28972 Federal Register / Vol. 70, No. 96 / Thursday, May 19, 2005 / Notices provisions of 5 U.S.C. 552, will be available for inspection and copying at the principal office of NASD. 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–NASD–2005–053 and should be submitted on or before June 9, 2005. For the Commission, by the Division of Market Regulation, pursuant to delegated authority.11 J. Lynn Taylor, Assistant Secretary. [FR Doc. E5–2505 Filed 5–18–05; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–51693; File No. SR–NASD– 2005–052] Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendments No. 1 and No. 2 Thereto Relating to Honorarium for Arbitrators Deciding Discovery-Related Motions May 12, 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 the National Association of Securities Dealers, Inc. (‘‘NASD’’), through its wholly owned subsidiary, NASD Dispute Resolution, Inc. (‘‘NASD Dispute Resolution’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) on April 14, 2005, on April 29, 2005 (Amendment No. 1) and on May 6, 2005, (Amendment No. 2), the proposed rule change as described in items I, II, and III below, which items have been prepared by NASD. 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 NASD Dispute Resolution is proposing to amend Interpretive Material (IM) 10104 of the NASD Code of Arbitration Procedure (‘‘Code’’) to provide payment to arbitrators for deciding discovery-related motions 11 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 1 15 VerDate jul<14>2003 22:14 May 18, 2005 Jkt 205001 without a hearing.3 Below is the text of the proposed rule change.4 Proposed new language is in italics; proposed deletions are in brackets. * * * * * IM–10104. Arbitrators’ Honorarium (a) All persons selected to serve as arbitrators pursuant to the Association’s Code of Arbitration Procedure shall be paid an honorarium for each hearing session (including a prehearing conference) in which they participate. (b) The honorarium shall be $200 for each hearing session and $75 per day additional honorarium to the chairperson of the panel. The honorarium for a case not requiring a hearing shall be $125. (c) The honorarium for travel to a canceled hearing session shall be $50. If a hearing session other than a prehearing conference is adjourned pursuant to Rule 10319(d), each arbitrator shall receive an additional honorarium of $100. (d) The Director may authorize a higher or additional honorarium for the use of a foreign hearing location. (e) Payment for Deciding DiscoveryRelated Motions Without a Hearing Session (1) NASD will pay each arbitrator an honorarium of $200 to decide a discovery-related motion without a hearing session. This paragraph does not apply to cases administered under Rules 10203 and 10302. (2) For purposes of paragraph (e)(1), a discovery-related motion and any replies or other correspondence relating to the motion shall be considered to be a single motion. (3) The panel will allocate the cost of the honoraria under paragraph (e)(1) to the parties pursuant to Rules 10205(c) and 10332(c). * * * * * II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NASD included statements concerning 3 On March 15, 2005, NASD filed a proposed rule change to provide written explanations in arbitration awards upon the request of customers, or of associated persons in industry controversies. This proposal amends IM–10104. See SR–NASD– 2005–032. 4 This IM will be renumbered as appropriate following Commission approval of the pending revisions to be NASD Code of Arbitration Procedure for Customer Disputes filed on October 15, 2003, and amended on January 3, 2005, January 19, 2005, and april 8, 2005 (SR–NASD–2003–158); and the NASD Code of Arbitration Procedure for Industry Disputes filed on January 16, 2004, and amended on February 26, 2004, January 3, 2005, and April 8, 2005 (SR–NASD–2004–011). PO 00000 Frm 00072 Fmt 4703 Sfmt 4703 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. NASD 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 In 2002, NASD Dispute Resolution conducted arbitrator focus groups across the country. One of the consistently raised concerns was the amount of time and effort invested by chairpersons in reviewing and deciding various discovery motions, especially in situations in which the motions are decided without a hearing (i.e., on the papers). Also, Dispute Resolution staff has found that the current lack of compensation for deciding such motions has made it more difficult to recruit current arbitrators to become chairpersons. Currently, arbitrators are not compensated for deciding discovery motions on the papers. Arbitrators are compensated, however, when they conduct pre-hearing conferences to hear argument from parties regarding discovery motions. NASD is, therefore, proposing to adopt a rule to compensate arbitrators in the amount of $200 (the same amount that is paid for an arbitrator to participate in a pre-hearing conference regarding discovery) to decide discovery motions on the papers. The new rule language states that NASD will pay arbitrators an honorarium of $200 to decide a discovery-related motion without a hearing session. For purposes of this rule, a discovery-related motion and any replies or other correspondence relating to the motion will be considered to be a single motion. If more than one arbitrator considers a discovery-related motion, each arbitrator will receive $200. The panel will allocate the cost of the honoraria as part of the eventual arbitration award. The rule will not apply to simplified cases administered under Rules 10203 and 10302. 2. Statutory Basis NASD believes that the proposed rule change is consistent with the provisions of sections 15A(b)(5) 5 and 15A(b)(6) 6 of the Act, which require, among other things, that the NASD’s rules provide 5 15 6 15 E:\FR\FM\19MYN1.SGM U.S.C. 78o–3(b)(5). U.S.C. 78o–3(b)(6). 19MYN1 Federal Register / Vol. 70, No. 96 / Thursday, May 19, 2005 / Notices for the equitable allocation of reasonable dues, fees, and other charges among members and issuers and other persons using any facility or system that the NASD operates or controls, and that NASD rules must be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD believes that the proposed rule change accomplishes these goals by encouraging arbitrators to decide discovery-related motions on the papers without the need for a pre-hearing conference, thereby expediting the pace of arbitrations, which should reduce the time between the filing of an arbitration claim and the rendering of an award. Moreover, the panel would allocate the honorarium for deciding a discoveryrelated motion equitably among the parties. (B) Self-Regulatory Organization’s Statement on Burden on Competition NASD does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended. (C) Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will: A. By order approve such proposed rule change, or B. Institute proceedings to determine whether the proposed rule change should be disapproved. 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–NASD–2005–052 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. Assistant Secretary. [FR Doc. E5–2506 Filed 5–18–05; 8:45 am] Jkt 205001 [Release No. 34–51691; File No. SR–CSE– 2003–06] Self-Regulatory Organizations; National Stock Exchange, Inc.; Order Approving Proposed Rule Change and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 3 to the Proposed Rule Change Relating to Corporate Governance of Listed Issuers May 12, 2005. PO 00000 7 17 CFR 200.30–3(a)(12). Frm 00073 Fmt 4703 15 U.S.C. 78s(b)(1). CFR 240.19b–4. 3 Id. 4 Securities Exchange Act Release No. 48832 (November 25, 2003), 68 FR 67715 (December 3, 2003) (‘‘Partial Approval Order’’). In the Partial Approval Order, the Commission granted accelerated approval to Amendment No. 1, and solicited comments from interested persons on Amendment No. 1. The Commission received no comments on Amendment No. 1. Amendment No. 2 was a technical amendment that was not subject to notice and comment. 2 17 BILLING CODE 8010–01–P 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: 22:14 May 18, 2005 SECURITIES AND EXCHANGE COMMISSION I. Introduction On September 12, 2003, the All submissions should refer to File Cincinnati Stock Exchange, now known Number SR–NASD–2005–052. This file as National Stock Exchange number should be included on the (‘‘Exchange’’ or ‘‘NSX’’), filed with the subject line if e-mail is used. To help the Securities and Exchange Commission Commission process and review your (‘‘Commission’’), pursuant to section comments more efficiently, please use 19(b)(1) of the Securities Exchange Act only one method. The Commission will of 1934 (‘‘Act’’) 1 and Rule 19b–4 post all comments on the Commission’s thereunder,2 a proposed rule change to Internet Web site (https://www.sec.gov/ amend Article IV of its By-Laws rules/sro.shtml). Copies of the pertaining to its listing standards, including the addition of new corporate submission, all subsequent governance standards applicable to amendments, all written statements listed companies. Among other things, with respect to the proposed rule the Exchange also proposed to amend change that are filed with the Article IV, Section 2 of the By-Laws, Commission, and all written relating to unlisted trading privileges. communications relating to the The proposed rule change was proposed rule change between the Commission and any person, other than published for comment in the3Federal Register on October 20, 2003. The those that may be withheld from the Commission received no comments on public in accordance with the the proposal. On November 19, 2003, provisions of 5 U.S.C. 552, will be the Exchange submitted Amendment available for inspection and copying at No. 1 to the proposed rule change. On the principal office of NASD. All November 21, 2003, the Exchange comments received will be posted submitted Amendment No. 2 to the without change; the Commission does proposed rule change. not edit personal identifying On November 25, 2003, the information from submissions. You Commission partially approved the should submit only information that proposed rule change as amended by you wish to make available publicly. All Amendment Nos. 1 and 2. The portion submissions should refer to the File of the proposal that remained Number SR–NASD–2005–052 and unapproved was the proposed change to Article IV, Section 2 of the By-Laws should be submitted on or before June relating to unlisted trading privileges.4 9, 2005. On April 19, 2005, the Exchange filed For the Commission, by the Division of Amendment No. 3 to the proposal, Market Regulation, pursuant to delegated revising the proposed change to Article authority.7 IV, Section 2. This Order approves this J. Lynn Taylor, remaining portion of the proposed rule IV. Solicitation of Comments VerDate jul<14>2003 28973 Sfmt 4703 E:\FR\FM\19MYN1.SGM 19MYN1

Agencies

SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 70, Number 96 (Thursday, May 19, 2005)]
[Notices]
[Pages 28972-28973]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-2506]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-51693; File No. SR-NASD-2005-052]


Self-Regulatory Organizations; National Association of Securities 
Dealers, Inc.; Notice of Filing of Proposed Rule Change and Amendments 
No. 1 and No. 2 Thereto Relating to Honorarium for Arbitrators Deciding 
Discovery-Related Motions

May 12, 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 
the National Association of Securities Dealers, Inc. (``NASD''), 
through its wholly owned subsidiary, NASD Dispute Resolution, Inc. 
(``NASD Dispute Resolution'') filed with the Securities and Exchange 
Commission (``SEC'' or ``Commission'') on April 14, 2005, on April 29, 
2005 (Amendment No. 1) and on May 6, 2005, (Amendment No. 2), the 
proposed rule change as described in items I, II, and III below, which 
items have been prepared by NASD. 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.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    NASD Dispute Resolution is proposing to amend Interpretive Material 
(IM) 10104 of the NASD Code of Arbitration Procedure (``Code'') to 
provide payment to arbitrators for deciding discovery-related motions 
without a hearing.\3\ Below is the text of the proposed rule change.\4\ 
Proposed new language is in italics; proposed deletions are in 
brackets.
---------------------------------------------------------------------------

    \3\ On March 15, 2005, NASD filed a proposed rule change to 
provide written explanations in arbitration awards upon the request 
of customers, or of associated persons in industry controversies. 
This proposal amends IM-10104. See SR-NASD-2005-032.
    \4\ This IM will be renumbered as appropriate following 
Commission approval of the pending revisions to be NASD Code of 
Arbitration Procedure for Customer Disputes filed on October 15, 
2003, and amended on January 3, 2005, January 19, 2005, and april 8, 
2005 (SR-NASD-2003-158); and the NASD Code of Arbitration Procedure 
for Industry Disputes filed on January 16, 2004, and amended on 
February 26, 2004, January 3, 2005, and April 8, 2005 (SR-NASD-2004-
011).
---------------------------------------------------------------------------

* * * * *

IM-10104. Arbitrators' Honorarium

    (a) All persons selected to serve as arbitrators pursuant to the 
Association's Code of Arbitration Procedure shall be paid an honorarium 
for each hearing session (including a prehearing conference) in which 
they participate.
    (b) The honorarium shall be $200 for each hearing session and $75 
per day additional honorarium to the chairperson of the panel. The 
honorarium for a case not requiring a hearing shall be $125.
    (c) The honorarium for travel to a canceled hearing session shall 
be $50. If a hearing session other than a prehearing conference is 
adjourned pursuant to Rule 10319(d), each arbitrator shall receive an 
additional honorarium of $100.
    (d) The Director may authorize a higher or additional honorarium 
for the use of a foreign hearing location.
    (e) Payment for Deciding Discovery-Related Motions Without a 
Hearing Session
    (1) NASD will pay each arbitrator an honorarium of $200 to decide a 
discovery-related motion without a hearing session. This paragraph does 
not apply to cases administered under Rules 10203 and 10302.
    (2) For purposes of paragraph (e)(1), a discovery-related motion 
and any replies or other correspondence relating to the motion shall be 
considered to be a single motion.
    (3) The panel will allocate the cost of the honoraria under 
paragraph (e)(1) to the parties pursuant to Rules 10205(c) and 
10332(c).
* * * * *

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

    In its filing with the Commission, NASD 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. NASD 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
    In 2002, NASD Dispute Resolution conducted arbitrator focus groups 
across the country. One of the consistently raised concerns was the 
amount of time and effort invested by chairpersons in reviewing and 
deciding various discovery motions, especially in situations in which 
the motions are decided without a hearing (i.e., on the papers). Also, 
Dispute Resolution staff has found that the current lack of 
compensation for deciding such motions has made it more difficult to 
recruit current arbitrators to become chairpersons. Currently, 
arbitrators are not compensated for deciding discovery motions on the 
papers. Arbitrators are compensated, however, when they conduct pre-
hearing conferences to hear argument from parties regarding discovery 
motions.
    NASD is, therefore, proposing to adopt a rule to compensate 
arbitrators in the amount of $200 (the same amount that is paid for an 
arbitrator to participate in a pre-hearing conference regarding 
discovery) to decide discovery motions on the papers. The new rule 
language states that NASD will pay arbitrators an honorarium of $200 to 
decide a discovery-related motion without a hearing session. For 
purposes of this rule, a discovery-related motion and any replies or 
other correspondence relating to the motion will be considered to be a 
single motion. If more than one arbitrator considers a discovery-
related motion, each arbitrator will receive $200. The panel will 
allocate the cost of the honoraria as part of the eventual arbitration 
award. The rule will not apply to simplified cases administered under 
Rules 10203 and 10302.
2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the 
provisions of sections 15A(b)(5) \5\ and 15A(b)(6) \6\ of the Act, 
which require, among other things, that the NASD's rules provide

[[Page 28973]]

for the equitable allocation of reasonable dues, fees, and other 
charges among members and issuers and other persons using any facility 
or system that the NASD operates or controls, and that NASD rules must 
be designed to prevent fraudulent and manipulative acts and practices, 
to promote just and equitable principles of trade, and, in general, to 
protect investors and the public interest. NASD believes that the 
proposed rule change accomplishes these goals by encouraging 
arbitrators to decide discovery-related motions on the papers without 
the need for a pre-hearing conference, thereby expediting the pace of 
arbitrations, which should reduce the time between the filing of an 
arbitration claim and the rendering of an award. Moreover, the panel 
would allocate the honorarium for deciding a discovery-related motion 
equitably among the parties.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78o-3(b)(5).
    \6\ 15 U.S.C. 78o-3(b)(6).
---------------------------------------------------------------------------

(B) Self-Regulatory Organization's Statement on Burden on Competition

    NASD does not believe that the proposed rule change will result in 
any burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Act, as amended.

(C) Self-Regulatory Organization's Statement on Comments on the 
Proposed Rule Change Received From Members, Participants, or Others

    Written comments were neither solicited nor received.

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

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

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views and 
arguments concerning the foregoing, including whether the proposed rule 
change 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-NASD-2005-052 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-NASD-2005-052. 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 at the principal office of NASD. 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-NASD-2005-052 and should be 
submitted on or before June 9, 2005.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\7\
---------------------------------------------------------------------------

    \7\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------

J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E5-2506 Filed 5-18-05; 8:45 am]
BILLING CODE 8010-01-P

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