Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Amendments to Exchange Rule 629 (“Schedule of Fees”) To Establish Processing Fees for Members, Member Organizations, and Allied Members That Are Parties to Arbitration Proceedings, 51102-51103 [E5-4714]
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51102
Federal Register / Vol. 70, No. 166 / Monday, August 29, 2005 / Notices
Commission believes that the proposal
is consistent with Sections 6(b)(5) and
6(b)(7) of the Act,6 which require,
among other things, that an exchange
have rules designed to promote just and
equitable principles of trade, protect
investors and the public interest, and
enhance the effectiveness and fairness
of the Exchange’s disciplinary
procedures. The Commission believes
that CBOE’s proposed rule changes
should help to improve the efficiency of
CBOE’s market by eliminating
unnecessary costs now borne by the
Exchange’s DPMs relating to the
maintenance of back-up quotation
systems.
As set forth in the Notice, CBOE Rules
8.85(a)(xi) and (xii) both impose an
obligation on DPMs to maintain
independent backup autoquote systems
that can be employed in the event that
a DPM’s proprietary autoquote system
should fail or be otherwise unavailable.
Rule 8.85(a)(xi) governs non-CBOE
Hybrid System (‘‘non-Hybrid’’) classes,
while Rule 8.85(a)(xii) governs CBOE
Hybrid System (‘‘Hybrid’’) classes.
With regard to CBOE Rule 8.85(a)(xi),
the Commission notes that the Exchange
has converted all of its DPM option
classes to the CBOE Hybrid System.
Thus, because non-Hybrid option
classes no longer exist, CBOE Rule
8.85(a)(xi) has no applicability. Its
repeal will have no impact on market
participants.
As regards CBOE Rule 8.85(a)(xii),
which requires DPMs to maintain an
independent backup autoquote system
that it may employ in the event its
proprietary autoquote system fails, the
Commission believes that the CBOE has
made a reasonable determination that
the backup obligation is no longer
necessary. The Commission has no basis
at this time to disagree with the CBOE’s
assessment that the recent adoption and
implementation of the electronic DPM
(‘‘e-DPM’’) program 7 on the Exchange
should provide a more appropriate and
cost effective safeguard against a DPM’s
inability to generate quotes in such
option classes. Pursuant to the
Exchange’s rules governing the program,
CBOE may allocate an option class that
is already allocated to a DPM to one or
more e-DPMs.8 Such e-DPMs provide
efficiency, competition and capital formation. 15
U.S.C. 78c(f).
6 15 U.S.C. 78f(b)(5) and 78f(b)(7).
7 See Exchange Act Release Nos. 49577 (April 19,
2004), 69 FR 22576 (April 26, 2004) (order
approving the process for approving e-DPMs on the
Exchange); 50003 (July 12, 2004), 69 FR 25647 (July
19, 2004) (order approving e-DPM trading rules).
8 See CBOE Rules 8.92 and 8.93.
VerDate Aug<18>2005
15:17 Aug 26, 2005
Jkt 205001
competing quotations accessible by
CBOE market participants.
Thus, the Commission believes that,
given the CBOE’s current trading
environment, the exchange has made a
reasonable determination that the
requirement to maintain a backup
quotation system is unnecessary and
unduly burdensome on DPMs. The
proposed rule changes appear to be
reasonably designed to help to put
DPMs on a more equal competitive
footing other market participants,
including electronic DPMs, which do
not have a backup quotation system
maintenance requirement. Moreover,
the Commission notes that deletion of
the backup autoquote rules would not
affect a DPM’s separate obligation to
provide continuous market quotations
for each of its allocated classes and
respective series.9
Finally, the Commission approves
CBOE’s proposal to remove references to
Rules 8.85(a)(xi) and 8.85(a)(xii) in its
Minor Rule Violations Plan.10
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act,11 that the
proposed rule change (SR–CBOE–2005–
28) be, and hereby is, approved.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.12
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–4712 Filed 8–26–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52316; File No. SR–NYSE–
2005–56]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change Relating to
Amendments to Exchange Rule 629
(‘‘Schedule of Fees’’) To Establish
Processing Fees for Members, Member
Organizations, and Allied Members
That Are Parties to Arbitration
Proceedings
August 22, 2005.
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’), and Rule 19b–4 2 thereunder,
notice is hereby given that on August
10, 2005, the New York Stock Exchange,
Inc. (‘‘NYSE’’ or the ‘‘Exchange’’) filed
9 See
CBOE Rule 8.85(a)(i).
CBOE Rule 17.50(g)(10).
11 15 U.S.C. 78s(b)(2).
12 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
10 See
PO 00000
Frm 00096
Fmt 4703
Sfmt 4703
with the Securities and Exchange
Commission (‘‘SEC’’ or the
‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the Exchange. For purposes
of Section 19(b)(3)(A)(ii) of the Act 3 and
Rule 19b–4(f)(2) thereunder,4 NYSE has
designated the proposed rule change as
establishing or changing a due, fee, or
other charge imposed by the selfregulatory organization on its members,
which renders the proposal effective
upon filing with the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The proposed rule change consists of
amendments to Rule 629 to impose
processing fees on members, member
organizations, and allied members in
connection with arbitration proceedings
in which more than $25,000 is in
dispute. Below is the text of the
proposed rule change to Rule 629.
Proposed new language is in italics;
proposed deletions are in [brackets].
Rule 629 Schedule of fees
(a) through (j) No Change.
*
*
*
*
*
(k) Arbitrator Selection and Hearing
Scheduling Processing Fees
(1) Each member, member firm,
member corporation or allied member
(hereinafter referred to as any ‘‘entity’’)
that is a party to an arbitration
proceeding in which more than $25,000
is in dispute will pay the following nonrefundable processing fees:
(a) An arbitrator selection fee of $750,
due at the time the parties are sent the
names of proposed arbitrators; and,
(b) A hearing scheduling fee in the
applicable amount set forth in the
schedule below, due when the parties
are notified of the date and location of
the first hearing session.
Amount of dispute
$1–$25,000 ...............................
$25,000.01–$50,000 .................
$50,000.01–$100,000 ...............
$100,000.01–$500,000 .............
$500,000.01–$1,000,000 ..........
$1,000,000.01–$5,000,000 .......
More than $5,000,000 ..............
Unspecified ...............................
Hearing
scheduling
fee
$0
$1,000
$1,700
$2,750
$4,000
$5,000
$5,500
$2,200
(2) If an associated person of an entity
is a party, the entity or entities that
3 15
4 17
E:\FR\FM\29AUN1.SGM
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19b–4(f)(2).
29AUN1
Federal Register / Vol. 70, No. 166 / Monday, August 29, 2005 / Notices
employed the associated person at the
time of the events which gave rise to the
dispute, claim or controversy will be
charged the processing fees, even if the
entity is not a party. No entity shall be
assessed more than one arbitrator
selection processing fee and one hearing
scheduling processing fee in any
arbitration proceeding.
(3) The processing fees for arbitrator
selection and hearing scheduling shall
not be chargeable under 629(c) to a
party other than the entity.
*
*
*
*
*
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of, and basis for,
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
forth in Sections A, B, and C below, of
the most significant aspects of such
statements.
1. Purpose
The proposed amendments to Rule
629 would establish certain processing
fees for members, member
organizations, and allied members that
are parties to arbitration proceedings in
which more than $25,000 is in dispute.
These fees would be assessed: (1) When
the names of the proposed arbitrators
are sent to the parties; and (2) when the
date and location of the hearing are sent
to the parties. The processing fees
would be assessed on the members,
member organizations, and allied
members when their associated
person(s) are the subject of claims, even
if the member, member organization, or
allied member is not a party. However,
no member, member organization, or
allied member would be assessed more
than one arbitrator selection fee and one
hearing scheduling fee in any arbitration
proceeding.
The processing fee, assessed when the
names of the arbitrators are sent to the
parties, would be fixed and not vary
based on the amount in dispute. The
processing fee, assessed when the date
and location of the hearing are sent to
the parties, would vary based on the
amount in dispute. Processing fees
would not be assessed on claims of
$25,000 or less, as these claims are
generally decided by one arbitrator on
the papers, without an actual hearing
being held.
VerDate Aug<18>2005
15:17 Aug 26, 2005
Jkt 205001
These fees would be assessed only on
members, member organizations, and
allied members; in no circumstances
would processing fees be charged to or
assessed against public customers.
As the arbitration caseload has
increased over the past several years,
the attendant costs to the Exchange in
maintaining the arbitration forum have
also increased. The assessment of
processing fees would offset a portion of
the increased costs.
2. Statutory Basis
The basis under the Act for this
proposed rule change is the requirement
under Section 6(b)(4) 5 that an exchange
have rules that provide for the equitable
allocation of reasonable dues, fees, and
other charges among its members and
other persons using its facilities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition not
necessary or appropriate in furtherance
of the purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants or Others
The Exchange has neither solicited
nor received written comments on the
proposed rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A) 6 of the Act and Rule 19b–
4(f)(2) 7 under the Act. The NYSE shall
implement the proposed rule change
thirty days after publication of the
proposed rule change in the Federal
Register.8 At any time within 60 days of
the filing of this proposed rule change,
the Commission may summarily
abrogate such rule change if it appears
to the Commission that such action is
necessary or appropriate in the public
interest, for the protection of investors,
or otherwise in furtherance of the
purposes of the Act.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
5 15
U.S.C. 78f(b)(4).
U.S.C. 78s(b)(3)(A).
7 17 CFR 240.19b–4(f)(2).
8 Telephone conversation between Karen
Kupersmith, Director of Arbitration, NYSE, and
Lourdes Gonzalez, Assistant Chief Counsel,
Division of Market Regulation, Commission,
(August 22, 2005).
6 15
PO 00000
Frm 00097
Fmt 4703
Sfmt 4703
51103
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 e-mail to rulecomments@sec.gov. Please include File
Number SR–NYSE–2005–56 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number SR–NYSE–2005–56. This file
number should be included on the
subject line if e-mail is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (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, 100 F Street, NE., Washington,
DC 20549. Copies of such filing will also
be available for inspection and copying
at the principal office of the NYSE. All
comments received will be posted
without change; the Commission does
not edit personal identifying
information from submissions. You
should submit only information that
you wish to make available publicly. All
submissions should refer to the File
Number SR–NYSE–2005–56 and should
be submitted on or before September 19,
2005.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.9
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5–4714 Filed 8–26–05; 8:45 am]
BILLING CODE 8010–01–P
9 17
E:\FR\FM\29AUN1.SGM
CFR 200.30–3(a)(12).
29AUN1
]]>Agencies
[Federal Register Volume 70, Number 166 (Monday, August 29, 2005)]
[Notices]
[Pages 51102-51103]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-4714]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52316; File No. SR-NYSE-2005-56]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of Proposed Rule Change
Relating to Amendments to Exchange Rule 629 (``Schedule of Fees'') To
Establish Processing Fees for Members, Member Organizations, and Allied
Members That Are Parties to Arbitration Proceedings
August 22, 2005.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act''), and Rule 19b-4 \2\ thereunder, notice is hereby
given that on August 10, 2005, the New York Stock Exchange, Inc.
(``NYSE'' or the ``Exchange'') filed with the Securities and Exchange
Commission (``SEC'' or the ``Commission'') the proposed rule change as
described in Items I, II, and III below, which Items have been prepared
by the Exchange. For purposes of Section 19(b)(3)(A)(ii) of the Act \3\
and Rule 19b-4(f)(2) thereunder,\4\ NYSE has designated the proposed
rule change as establishing or changing a due, fee, or other charge
imposed by the self-regulatory organization on its members, which
renders the proposal effective upon filing with the Commission. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The proposed rule change consists of amendments to Rule 629 to
impose processing fees on members, member organizations, and allied
members in connection with arbitration proceedings in which more than
$25,000 is in dispute. Below is the text of the proposed rule change to
Rule 629. Proposed new language is in italics; proposed deletions are
in [brackets].
Rule 629 Schedule of fees
(a) through (j) No Change.
* * * * *
(k) Arbitrator Selection and Hearing Scheduling Processing Fees
(1) Each member, member firm, member corporation or allied member
(hereinafter referred to as any ``entity'') that is a party to an
arbitration proceeding in which more than $25,000 is in dispute will
pay the following non-refundable processing fees:
(a) An arbitrator selection fee of $750, due at the time the
parties are sent the names of proposed arbitrators; and,
(b) A hearing scheduling fee in the applicable amount set forth in
the schedule below, due when the parties are notified of the date and
location of the first hearing session.
------------------------------------------------------------------------
Hearing
Amount of dispute scheduling
fee
------------------------------------------------------------------------
$1-$25,000................................................. $0
$25,000.01-$50,000......................................... $1,000
$50,000.01-$100,000........................................ $1,700
$100,000.01-$500,000....................................... $2,750
$500,000.01-$1,000,000..................................... $4,000
$1,000,000.01-$5,000,000................................... $5,000
More than $5,000,000....................................... $5,500
Unspecified................................................ $2,200
------------------------------------------------------------------------
(2) If an associated person of an entity is a party, the entity or
entities that
[[Page 51103]]
employed the associated person at the time of the events which gave
rise to the dispute, claim or controversy will be charged the
processing fees, even if the entity is not a party. No entity shall be
assessed more than one arbitrator selection processing fee and one
hearing scheduling processing fee in any arbitration proceeding.
(3) The processing fees for arbitrator selection and hearing
scheduling shall not be chargeable under 629(c) to a party other than
the entity.
* * * * *
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the Exchange included statements
concerning the purpose of, and basis for, the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. The Exchange has prepared summaries, set forth in
Sections A, B, and C below, of the most significant aspects of such
statements.
1. Purpose
The proposed amendments to Rule 629 would establish certain
processing fees for members, member organizations, and allied members
that are parties to arbitration proceedings in which more than $25,000
is in dispute. These fees would be assessed: (1) When the names of the
proposed arbitrators are sent to the parties; and (2) when the date and
location of the hearing are sent to the parties. The processing fees
would be assessed on the members, member organizations, and allied
members when their associated person(s) are the subject of claims, even
if the member, member organization, or allied member is not a party.
However, no member, member organization, or allied member would be
assessed more than one arbitrator selection fee and one hearing
scheduling fee in any arbitration proceeding.
The processing fee, assessed when the names of the arbitrators are
sent to the parties, would be fixed and not vary based on the amount in
dispute. The processing fee, assessed when the date and location of the
hearing are sent to the parties, would vary based on the amount in
dispute. Processing fees would not be assessed on claims of $25,000 or
less, as these claims are generally decided by one arbitrator on the
papers, without an actual hearing being held.
These fees would be assessed only on members, member organizations,
and allied members; in no circumstances would processing fees be
charged to or assessed against public customers.
As the arbitration caseload has increased over the past several
years, the attendant costs to the Exchange in maintaining the
arbitration forum have also increased. The assessment of processing
fees would offset a portion of the increased costs.
2. Statutory Basis
The basis under the Act for this proposed rule change is the
requirement under Section 6(b)(4) \5\ that an exchange have rules that
provide for the equitable allocation of reasonable dues, fees, and
other charges among its members and other persons using its facilities.
---------------------------------------------------------------------------
\5\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition not necessary or appropriate in
furtherance of the purposes of the Act.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants or Others
The Exchange has neither solicited nor received written comments on
the proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A) \6\ of the Act and Rule 19b-4(f)(2) \7\ under the Act. The
NYSE shall implement the proposed rule change thirty days after
publication of the proposed rule change in the Federal Register.\8\ At
any time within 60 days of the filing of this proposed rule change, the
Commission may summarily abrogate such rule change if it appears to the
Commission that such action is necessary or appropriate in the public
interest, for the protection of investors, or otherwise in furtherance
of the purposes of the Act.
---------------------------------------------------------------------------
\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4(f)(2).
\8\ Telephone conversation between Karen Kupersmith, Director of
Arbitration, NYSE, and Lourdes Gonzalez, Assistant Chief Counsel,
Division of Market Regulation, Commission, (August 22, 2005).
---------------------------------------------------------------------------
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 e-mail to rule-comments@sec.gov. Please include File
Number SR-NYSE-2005-56 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-NYSE-2005-56. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (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, 100 F Street, NE.,
Washington, DC 20549. Copies of such filing will also be available for
inspection and copying at the principal office of the NYSE. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to the File Number SR-NYSE-2005-56 and should
be submitted on or before September 19, 2005.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\9\
---------------------------------------------------------------------------
\9\ 17 CFR 200.30-3(a)(12).
---------------------------------------------------------------------------
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. E5-4714 Filed 8-26-05; 8:45 am]
BILLING CODE 8010-01-P
