Self-Regulatory Organizations; New York Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change and Amendment No. 1 Thereto Relating to Increasing Certain Fees Charged by the Exchange to Its Members and Member Organizations, 7820-7823 [E6-2010]
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7820
Federal Register / Vol. 71, No. 30 / Tuesday, February 14, 2006 / Notices
At any time within 60 days of the
filing of the 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 the furtherance of the
purposes of the Act.17
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. 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–Amex–2006–009 on the
subject line.
rmajette on PROD1PC67 with NOTICES
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–Amex–2006–009. 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, 100 F Street, NE., Washington,
considered the impact of the proposed rule on
efficiency, competition, and capital formation. 15
U.S.C. 78c(f).
17 The effective date of the original proposed rule
change is February 2, 2006, and the effective date
of Amendment No. 1 is February 3, 2006. For
purposes of calculating the 60-day period within
which the Commission may summarily abrogate the
proposed rule change, as amended, the Commission
considers the period to commence on February 3,
2006, the date on which the Exchange submitted
Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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DC 20549. Copies of such filing also will
be available for inspection and copying
at the principal office of the Amex. 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–Amex–2006–009 and
should be submitted on or before March
7, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.18
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6–2011 Filed 2–13–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53235; File No. SR–NYSE–
2005–92]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing and Immediate Effectiveness of
a Proposed Rule Change and
Amendment No. 1 Thereto Relating to
Increasing Certain Fees Charged by
the Exchange to Its Members and
Member Organizations
February 6, 2006.
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 December
23, 2005, the New York Stock Exchange,
Inc. (‘‘NYSE’’ 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 the NYSE. On
February 2, 2006, the NYSE filed
Amendment No. 1 to the proposed rule
change.3 The Exchange has designated
this proposal as one establishing or
changing a due, fee, or other charge
imposed by the NYSE under section
19(b)(3)(A)(ii) of the Act,4 and Rule
19b–4(f)(2) thereunder,5 which renders
the proposal effective upon filing with
the Commission. The Commission is
publishing this notice to solicit
18 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
3 In Amendment No. 1, the NYSE made nonsubstantive changes to the text of the proposed rule
change.
4 15 U.S.C. 78s(b)(3)(A)(ii).
5 17 CFR 240.19b–4(f)(2).
1 15
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comments on the proposed rule change,
as amended, from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The NYSE proposes to modify certain
fees that the Exchange charges its
members and member organizations.
The proposed rule change increases the
following fees: (1) Margin Extension
Fees; (2) The Series 7 (General
Securities Registered Representative)
Examination Development Fee; (3)
Statutory Disqualification Fees; and (4)
the session fee for the regulatory
element of the continuing education
requirements of NYSE Rule 345A
(‘‘Continuing Education for Registered
Persons’’). Below is the text of the
proposed rule change. Proposed new
language is in italics; proposed
deletions are in [brackets].
NYSE 2005 Price List
*
*
*
*
*
Pages 1–8 No changes.
Registration Fees
*
*
*
*
*
Credit Extensions
Amount per extension [$2.00]$4.00 6
*
*
*
*
*
Statutory Disqualification Filing Fee
[1,000.00]$1,500.00
Statutory Disqualification Review Fee
$1,000.00 7
*
*
*
*
*
Regulatory Element Fee
$75.00 8
Testing Fees: Please call 212.656.2578
for information.
Qualification Examinations
Series 7 Fee
*
*
*
$100.00 9
*
*
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
NYSE 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
6 The $4.00 fee is effective as of January 1, 2006.
The fee was $2.00 prior to January 1, 2006.
7 The $1,000.00 fee is effective as of January 1,
2006. There was no fee before for the review of
statutory disqualification applications, prior to
January 1, 2006.
8 The $75.00 fee is effective as of January 1, 2006.
The fee was $60.00, prior to January 1, 2006.
9 The $100.00 fee is effective as of January 1,
2006. The fee was $90.00, prior to January 1, 2006.
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Federal Register / Vol. 71, No. 30 / Tuesday, February 14, 2006 / Notices
may be examined at the places specified
in Item IV below. 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
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1. Purpose
The Exchange proposes to increase
certain qualification examination and
regulatory fees 10 it assesses on its
members and member organizations.
Margin Extension Fees. Under
Regulation T 11 of the Federal Reserve
System and Rule 15c3–3 12 under the
Act, broker-dealers may file on behalf of
customers requests to extend under
‘‘exceptional circumstances’’ the time
period which customers have to pay for
a security purchased or to deliver a
security sold. Since January 1978, the
Exchange has charged member
organizations a $2 fee per extension
request for processing these extensions
of time through the Exchange’s
automated Margin Extension Systems
(‘‘MEX’’).13 MEX maintains a history of
Regulation T extensions submitted to
the Exchange for each customer, and
thus helps prevent excessive numbers of
requests and customer abuses of the
extension privilege.
As a result of enhancements to the
MEX systems, increasing costs
associated with providing these services
to broker-dealers on behalf of customers
and expenses incurred in monitoring for
compliance with applicable margin and
sales practice rules the Exchange is
proposing to increase this fee to $4 an
extension request. The proposed fee
increase would be effective January 1,
2006.
Series 7 Examination Development
Fee. The Series 7 (General Securities
Registered Representatives Qualification
Examination) is developed, maintained,
and owned by the Exchange. It is
intended to safeguard the investing
public by helping to ensure that
registered representatives are competent
to perform their jobs. Given this
purpose, the Series 7 examination seeks
to measure accurately and reliably the
10 The 2005 Price List delineates Regulatory Fees,
except for Qualification Examinations. The Price
List can be found at https://www.nyse.com/pdfs/
2005pricelist_a.pdf. It will be updated in 2006 to
also include qualification examination fees.
11 12 CFR 220.1–12.
12 17 CFR 240.15c3–3.
13 See NYSE Information Memo 77–59, dated
December 30, 1977 in which the Exchange
announced a new fee schedule for charges for
specific services, including extension charges,
provided by the Exchange.
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14:46 Feb 13, 2006
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degree to which each candidate
possesses the knowledge, skills and
abilities needed to perform the critical
functions of a registered representative.
The examination is 6 hours and consists
of 250 multiple-choice questions.
Currently the fee for the Series 7
examination is $225. Of the $225, the
NASD receives $135 and the Exchange
receives $90. The NASD’s fee is based
on the cost to NASD to schedule and
administer the examination, maintain
records, and undertake systems changes.
The Exchange development fee
includes costs incurred to develop and
implement the Series 7 examination as
well as to monitor for compliance with
applicable registration, reporting and
sales practices rules. NASD has filed a
proposed rule change increasing the
administration fee to $150.14 This fee
applies to all NYSE members and
member organizations that are also
members of NASD and to NYSE only
members and member organizations.
The Exchange proposes to increase
the development fee from $90 to $100.
The total examination and development
fees for each individual who takes the
Series 7 examination for registration as
a Registered Representative will be
$250. The fee would be effective January
1, 2006.
Since the implementation of the
Series 7 examination, the Exchange has
continued to update, as necessary, the
examination content and questions,
maintain statistics and conduct various
committee meetings. Accordingly, this
fee will be reassessed on an on-going
basis, as is the case with various other
NYSE qualification examinations.
Statutory Disqualification Fees. NYSE
Rule 346(f) (Limitations-Employment
and Association with Members and
Member Organizations) provides, in
part, that except as otherwise permitted
by the Exchange, no member, member
organization, allied member, approved
person, or employee shall have
associated with it any person who is
known to be subject to a statutory
disqualification as defined in section
3(a)(39)15 of the Act. NYSE Rule 346
further provides that any member
organization seeking permission to have
such person continue to be or become
associated with it shall pay a fee in an
amount to be determined by the
Exchange.
The Act prohibits a person (including
broker-dealers) subject to a statutory
14 See Securities Exchange Act Release No. 52981
(December 19, 2005), 70 FR 76480 (December 27,
2005) (SR–NASD–2005–133). The actual change
proposed in the filing is an increase in the Series
7 fee from $225 to $250, of which $150 is the
administration fee paid to the NASD.
15 15 U.S.C. 78c(a)(39).
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7821
disqualification (e.g., a suspension or
bar by the Commission or another
exchange or being convicted of certain
criminal activities) from being
associated with a broker-dealer unless
specific application to the Commission
for such association is made by a selfregulatory organization (‘‘SRO’’) on
behalf of the person. The SRO makes
such application after investigation of
the facts surrounding the request.
Specifically, Rule 19h–116 under the
Exchange Act provides, in part, that any
SRO proposing to admit or continue any
person’s association with a member,
notwithstanding a statutory
disqualification, as defined in section
3(a)(39) under the Exchange Act,17 shall
file a notice with the Commission of
such proposed admission or
continuance.18
In connection with a Rule 19h–1
filing made on behalf of an individual,
the various Exchange Divisions,
including Member Firm Regulation and
Enforcement, review various
documents, including a description of
the individual’s proposed duties and
responsibilities. In conducting such
reviews, the Exchange examines the
circumstances surrounding the statutory
disqualification and requests
verification that all terms and
conditions of the disqualification are
met. Further, the Exchange reviews the
firm’s disciplinary and examination
history, including any open matters
before its Enforcement division. The
purpose of the review is to ensure that
adequate supervisory procedures are in
effect. In connection with the Rule 19h–
1 filing, the Exchange also responds to
comments by Commission staff.19
When such filings are made on behalf
of an entity (e.g., a member firm), the
process is similar to what is described
above. In addition, the Exchange will
request information from a firm as to
what procedures were put in place to
prevent a recurrence, and/or verification
of payment of fines and/or compliance
with an undertaking. The Exchange’s
Enforcement Division reviews the
filings/applications and documents in
making an evaluation into the nature of
16 17
CFR 240.19h–1.
a result of the Sarbanes-Oxley Act, persons
found to have violated certain state securities and
insurance regulations and banking laws are also
now subject to statutory disqualification.
18 Under Rule 19h–1, a member organization
willing to employ a person subject to a statutory
disqualification makes an application to the
Exchange for approval. If the Exchange approves
the employing firm’s application, it would submit
it to the Commission.
19 In certain instances, the Commission may
request additional information or recommend that
additional supervisory controls be in place before
approving an application.
17 As
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Federal Register / Vol. 71, No. 30 / Tuesday, February 14, 2006 / Notices
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the crime and/or offense committed by
the statutory disqualification, and where
appropriate, conducts further
background research, e.g., examining
court decrees, in completing its review.
Currently, pursuant to NYSE Rule
346(f), when a member organization
seeks approval to remain or become
associated with a person subject to any
statutory disqualification, the Exchange
imposes a $1,000 fee for filing the notice
pursuant to Commission Rule 19h–1
under the Act.20 In instances, where the
Exchange is not required to make such
a notice filing (e.g., clerical and
ministerial persons engaged in
securities activities) but nevertheless
reviews the request, it currently assesses
no fee. Although no fees are currently
charged for such reviews, the Exchange,
as noted below, nevertheless incurs
expenses in connection with such
reviews.
As a result of costs associated with
the development and maintenance of a
new system 21 to track statutory
disqualifications, the increased cost of
processing filings and the increased
costs of conducting examination
oversight of statutory disqualifications,
the Exchange is proposing that a fee in
the amount of $1,000 be charged in
instances where reviews are performed
but a Rule 9h–1 filing is not required.22
In instances where the Exchange is
making the Rule 19h–1 filing, it is
proposing that such fee be increased
from $1,000 to $1,500.23 The proposed
fees of $1,000 and $1,500 are
comparable to those charged by
NASD.24 The proposed fee increase
would be effective January 1, 2006.
Regulatory Element Fee. NYSE Rule
345A provides in part, that no member
or member organization shall permit
any registered person to continue to,
and no registered person shall continue
to perform duties as a registered person
unless such person has complied with
the Regulatory Element 25 continuing
education requirements of NYSE Rule
345A.
The Regulatory Element requires each
subject registered person to complete a
standardized, computer-based,
20 See Securities Exchange Act Release No. 26674
(March 29, 1989), 54 FR 13801 (April 5, 1989) (SR–
NYSE–88–45).
21 In May 2005, Member Firm Regulation
implemented its new Statutory Disqualification/
Special Supervision (SD/SS) System to track
statutory disqualifications.
22 See Securities Exchange Act Release No. 25383
(February 23, 1988), 53 FR 6046 (February 29, 1988)
(SR–NASD–88–3)
23 See Securities Exchange Act Release No. 34897
(October 26, 1994), 59 FR 54648 (November 1, 1994)
(SR–NASD–94–57).
24 See supra notes 21 and 22.
25 See NYSE Rule 345A(a).
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14:46 Feb 13, 2006
Jkt 208001
interactive continuing education
program within 120 days of their second
registration anniversary date and every
three years thereafter, or as otherwise
prescribed by the Exchange. The
purpose of this requirement is to help
ensure that registered persons are kept
up-to-date on regulatory, compliance,
and sales practice-related industry rules
and issues. There are three Regulatory
Element programs: The S201 Supervisor
Program, the S106 Series 6 Program, and
the S101 General Program for Series 7
and all other registrations. Persons who
fail to complete the Regulatory Element
within the prescribed time frame are
deemed inactive and may not perform,
nor receive compensation for, functions
requiring registration.
The Regulatory Element is a
component of the Securities Industry
Continuing Education Program
(‘‘Program’’) under NYSE Rule 345A.
The Securities Industry/Regulatory
Council on Continuing Education
(‘‘Council’’)26 was organized in 1995 to
facilitate cooperative industry and
regulatory coordination of the
administration and future development
of the Program in keeping with
applicable industry regulations and
changing industry needs. Its roles
include recommending and developing
specific content and questions for the
Regulatory Element, defining minimum
core curricula for the Firm Element
component of the Program, and
developing and updating information
about the Program for industry-wide
dissemination.
It is the Council’s responsibility to
maintain the Program on a revenue
neutral basis while maintaining
adequate reserves for unanticipated
future expenditures.27 In December
2003, the Council voted to reduce the
Regulatory Element session fee from $65
to $60, effective January 1, 2004, in
order to reduce the reserves to a level
necessary to support current and
expected programs and expenses. The
Council decided to review the reserve
level and evaluate the Regulatory
Element session fee on an annual basis.
The 2004 financial review and
26 The
Council currently consists of 20
individuals, 14 of whom are securities industry
professionals associated with NASD member firms
and six of whom represent self-regulatory
organizations (the American Stock Exchange LLC,
the Chicago Board Options Exchange, Incorporated,
the Municipal Securities Rulemaking Board, NASD,
the New York Stock Exchange, Inc., and the
Philadelphia Stock Exchange, Inc.).
27 The Regulatory Element session fee was
initially set at $75 when NASD established the
continuing education requirements in 1995. The
session fee was reduced in 1999 to $65 and again
in 2004 to $60. The proposed increase returns the
Regulatory Element session fee to its original 1995
level.
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Frm 00102
Fmt 4703
Sfmt 4703
evaluation produced no change in the
Regulatory Element session fee. In
September 2005, the Council’s annual
financial review and evaluation
revealed that unless the Regulatory
Element session fee were adjusted, the
Council’s reserves were likely to be
insufficient in 2006. The reasons for the
declining surplus are: (1) Lower than
projected session volume resulting in a
significant decrease in actual revenue
over projected revenue; (2) higher
delivery-related expenses beginning in
2006; and (3) costs associated with the
rebuilding of PROCTOR.28 At its
September 2005 meeting, the Council
voted unanimously to increase the
Regulatory Element session fee from $60
to $75 effective January 1, 2006, in order
to meet costs and maintain an adequate
reserve in 2006.29
The proposed implementation date is
January 1, 2006.
2. Statutory Basis
The NYSE believes the proposed rule
change is consistent with section 6(b) of
the Act,30 in general, and furthers the
objectives of section 6(b)(4)31 of the Act
in particular, in that it is designed to
provide for the equitable allocation of
reasonable dues, fees and other charges
among its members, and issuers and
other persons using its facilities.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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
NYSE has neither solicited nor
received 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)(ii) of the Act 32 and Rule
28 PROCTOR is an NASD technology system that
supports computer-based testing and training. The
Regulatory Element program uses PROCTOR to
package content, deliver, score and report results,
and maintain and generate statistical data related to
the Program.
29 See Securities Exchange Act Release No. 52947
(December 13, 2005), 70 FR 75517 (December 20,
2005) (SR–NASD–2005–132).
30 15 U.S.C. 78f(b).
31 15 U.S.C. 78f(b)(4).
32 15 U.S.C. 78s(b)(3)(A)(ii).
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Federal Register / Vol. 71, No. 30 / Tuesday, February 14, 2006 / Notices
19b–4(f)(2) thereunder,33 because it
establishes or changes a due, fee, or
other charge imposed by the Exchange.
Accordingly, the proposal will take
effect upon filing with the Commission.
At any time within 60 days of the filing
of the 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.34
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. 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–NYSE–2005–92 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–2005–92. 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
33 17
CFR 240.19b–4(f)(2).
effective date of the original proposed rule
change is December 23, 2005, and the effective date
of Amendment No. 1 is February 2, 2006. For
purposes of calculating the 60-day period within
which the Commission may summarily abrogate the
proposed rule change, as amended, under section
19(b)(3)(C) of the Act, the Commission considers
the period to commence on February 2, 2006, the
date on which the NYSE submitted Amendment
No. 1. See 15 U.S.C. 78s(b)(3)(C).
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34 The
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14:46 Feb 13, 2006
Jkt 208001
provisions of 5 U.S.C. 552, will be
available for inspection and copying in
the Commission’s Public Reference
Room. Copies of the filing also will be
available for inspection and copying at
the principal offices 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–2005–92 and should
be submitted on or before March 7,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.35
Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6–2010 Filed 2–13–06; 8:45 am]
BILLING CODE 8010–01–P
DEPARTMENT OF STATE
[Public Notice: 5307]
60-Day Notice of Proposed Information
Collection: Form DS–3097, Exchange
Visitor Program Annual Report, and
OMB Control Number 1405–0151
Notice of request for public
comments.
ACTION:
SUMMARY: The Department of State is
seeking Office of Management and
Budget (OMB) approval for the
information collection described below.
The purpose of this notice is to allow 60
days for public comment in the Federal
Register preceding submission to OMB.
We are conducting this process in
accordance with the Paperwork
Reduction Act of 1995.
Title of Information Collection:
Exchange Visitor Program Annual
Report.
OMB Control Number: 1405–0151.
Type of Request: Extension of a
Currently Approved Collection.
Originating Office: Educational and
Cultural Affairs, Office of Exchange
Coordination and Designation, ECA/EC/
PS.
Form Number: Form DS–3097.
Respondents: Designated J–1 program
sponsors.
Estimated Number of Respondents:
1468.
Estimated Number of Responses: 1468
annually.
Average Hours per Response: 1 hour.
Total Estimated Burden: 1468 hours.
Frequency: Annually.
35 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00103
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7823
Obligation to Respond: Mandatory.
The Department will accept
comments from the public up to 60 days
from date of publication in the Federal
Register.
ADDRESSES: You may submit comments,
identified by any of the following
methods:
• E-mail: jexchanges@state.gov. You
must include the RIN in the subject line
of your message.
• Mail (paper, disk, or CD–ROM
submissions): U.S. Department of State,
Office of Exchange Coordination and
Designation, SA–44, 301 4th Street,
SW., Room 734, Washington, DC 20547.
• Fax: 202–203–5087.
Persons with access to the Internet
may also view this notice and provide
comments by going to the
regulations.gov Web site at: https://
www.regulations.gov/index.cfm.
FOR FURTHER INFORMATION CONTACT:
Stanley S. Colvin, Acting Director,
Office of Exchange Coordination and
Designation, U.S. Department of State,
SA–44, 301 4th Street, SW., Room 734,
Washington, DC 20547; or e-mail at
jexchanges@state.gov.
DATES:
We are
soliciting public comments to permit
the Department to:
• Evaluate whether the proposed
information collection is necessary for
the proper performance of our
functions.
• Evaluate the accuracy of our
estimate of the burden of the proposed
collection, including the validity of the
methodology and assumptions used.
• Enhance the quality, utility, and
clarity of the information to be
collected.
• Minimize the reporting burden on
those who are to respond, including the
use of automated collection techniques
or other forms of technology.
SUPPLEMENTARY INFORMATION:
Abstract of Proposed Collection
Annual reports from designated
program sponsors assist the Department
in oversight and administration of the J–
1 visa program. The reports provide
statistical data on the number of
exchange participants an organization
sponsored per category. Program
sponsors include government agencies,
academic institutions, not-for-profit and
for-profit organizations.
Methodology
Annual reports are run through the
Student and Exchange Visitor
Information System (SEVIS) and then
printed and sent to the Department. The
Department allows sponsors to submit
annual reports by mail or fax at this
time. There are measures being taken to
E:\FR\FM\14FEN1.SGM
14FEN1
]]>Agencies
[Federal Register Volume 71, Number 30 (Tuesday, February 14, 2006)]
[Notices]
[Pages 7820-7823]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-2010]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53235; File No. SR-NYSE-2005-92]
Self-Regulatory Organizations; New York Stock Exchange, Inc.;
Notice of Filing and Immediate Effectiveness of a Proposed Rule Change
and Amendment No. 1 Thereto Relating to Increasing Certain Fees Charged
by the Exchange to Its Members and Member Organizations
February 6, 2006.
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 December 23, 2005, the New York Stock Exchange, Inc. (``NYSE'' 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 the NYSE. On February
2, 2006, the NYSE filed Amendment No. 1 to the proposed rule change.\3\
The Exchange has designated this proposal as one establishing or
changing a due, fee, or other charge imposed by the NYSE under section
19(b)(3)(A)(ii) of the Act,\4\ and Rule 19b-4(f)(2) thereunder,\5\
which renders the proposal effective upon filing with the Commission.
The Commission is publishing this notice to solicit comments on the
proposed rule change, as amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, the NYSE made non-substantive changes to
the text of the proposed rule change.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The NYSE proposes to modify certain fees that the Exchange charges
its members and member organizations. The proposed rule change
increases the following fees: (1) Margin Extension Fees; (2) The Series
7 (General Securities Registered Representative) Examination
Development Fee; (3) Statutory Disqualification Fees; and (4) the
session fee for the regulatory element of the continuing education
requirements of NYSE Rule 345A (``Continuing Education for Registered
Persons''). Below is the text of the proposed rule change. Proposed new
language is in italics; proposed deletions are in [brackets].
NYSE 2005 Price List
* * * * *
Pages 1-8 No changes.
Registration Fees
* * * * *
Credit Extensions
Amount per extension [$2.00]$4.00 \6\
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\6\ The $4.00 fee is effective as of January 1, 2006. The fee
was $2.00 prior to January 1, 2006.
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* * * * *
Statutory Disqualification Filing Fee [1,000.00]$1,500.00
Statutory Disqualification Review Fee $1,000.00 \7\
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\7\ The $1,000.00 fee is effective as of January 1, 2006. There
was no fee before for the review of statutory disqualification
applications, prior to January 1, 2006.
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* * * * *
Regulatory Element Fee $75.00 \8\
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\8\ The $75.00 fee is effective as of January 1, 2006. The fee
was $60.00, prior to January 1, 2006.
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Testing Fees: Please call 212.656.2578 for information.
Qualification Examinations
Series 7 Fee $100.00 \9\
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\9\ The $100.00 fee is effective as of January 1, 2006. The fee
was $90.00, prior to January 1, 2006.
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* * * * *
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NYSE 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
[[Page 7821]]
may be examined at the places specified in Item IV below. 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 Exchange proposes to increase certain qualification examination
and regulatory fees \10\ it assesses on its members and member
organizations.
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\10\ The 2005 Price List delineates Regulatory Fees, except for
Qualification Examinations. The Price List can be found at https://
www.nyse.com/pdfs/2005pricelist_a.pdf. It will be updated in 2006
to also include qualification examination fees.
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Margin Extension Fees. Under Regulation T \11\ of the Federal
Reserve System and Rule 15c3-3 \12\ under the Act, broker-dealers may
file on behalf of customers requests to extend under ``exceptional
circumstances'' the time period which customers have to pay for a
security purchased or to deliver a security sold. Since January 1978,
the Exchange has charged member organizations a $2 fee per extension
request for processing these extensions of time through the Exchange's
automated Margin Extension Systems (``MEX'').\13\ MEX maintains a
history of Regulation T extensions submitted to the Exchange for each
customer, and thus helps prevent excessive numbers of requests and
customer abuses of the extension privilege.
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\11\ 12 CFR 220.1-12.
\12\ 17 CFR 240.15c3-3.
\13\ See NYSE Information Memo 77-59, dated December 30, 1977 in
which the Exchange announced a new fee schedule for charges for
specific services, including extension charges, provided by the
Exchange.
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As a result of enhancements to the MEX systems, increasing costs
associated with providing these services to broker-dealers on behalf of
customers and expenses incurred in monitoring for compliance with
applicable margin and sales practice rules the Exchange is proposing to
increase this fee to $4 an extension request. The proposed fee increase
would be effective January 1, 2006.
Series 7 Examination Development Fee. The Series 7 (General
Securities Registered Representatives Qualification Examination) is
developed, maintained, and owned by the Exchange. It is intended to
safeguard the investing public by helping to ensure that registered
representatives are competent to perform their jobs. Given this
purpose, the Series 7 examination seeks to measure accurately and
reliably the degree to which each candidate possesses the knowledge,
skills and abilities needed to perform the critical functions of a
registered representative. The examination is 6 hours and consists of
250 multiple-choice questions.
Currently the fee for the Series 7 examination is $225. Of the
$225, the NASD receives $135 and the Exchange receives $90. The NASD's
fee is based on the cost to NASD to schedule and administer the
examination, maintain records, and undertake systems changes.
The Exchange development fee includes costs incurred to develop and
implement the Series 7 examination as well as to monitor for compliance
with applicable registration, reporting and sales practices rules. NASD
has filed a proposed rule change increasing the administration fee to
$150.\14\ This fee applies to all NYSE members and member organizations
that are also members of NASD and to NYSE only members and member
organizations.
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\14\ See Securities Exchange Act Release No. 52981 (December 19,
2005), 70 FR 76480 (December 27, 2005) (SR-NASD-2005-133). The
actual change proposed in the filing is an increase in the Series 7
fee from $225 to $250, of which $150 is the administration fee paid
to the NASD.
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The Exchange proposes to increase the development fee from $90 to
$100. The total examination and development fees for each individual
who takes the Series 7 examination for registration as a Registered
Representative will be $250. The fee would be effective January 1,
2006.
Since the implementation of the Series 7 examination, the Exchange
has continued to update, as necessary, the examination content and
questions, maintain statistics and conduct various committee meetings.
Accordingly, this fee will be reassessed on an on-going basis, as is
the case with various other NYSE qualification examinations.
Statutory Disqualification Fees. NYSE Rule 346(f) (Limitations-
Employment and Association with Members and Member Organizations)
provides, in part, that except as otherwise permitted by the Exchange,
no member, member organization, allied member, approved person, or
employee shall have associated with it any person who is known to be
subject to a statutory disqualification as defined in section
3(a)(39)\15\ of the Act. NYSE Rule 346 further provides that any member
organization seeking permission to have such person continue to be or
become associated with it shall pay a fee in an amount to be determined
by the Exchange.
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\15\ 15 U.S.C. 78c(a)(39).
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The Act prohibits a person (including broker-dealers) subject to a
statutory disqualification (e.g., a suspension or bar by the Commission
or another exchange or being convicted of certain criminal activities)
from being associated with a broker-dealer unless specific application
to the Commission for such association is made by a self-regulatory
organization (``SRO'') on behalf of the person. The SRO makes such
application after investigation of the facts surrounding the request.
Specifically, Rule 19h-1\16\ under the Exchange Act provides, in part,
that any SRO proposing to admit or continue any person's association
with a member, notwithstanding a statutory disqualification, as defined
in section 3(a)(39) under the Exchange Act,\17\ shall file a notice
with the Commission of such proposed admission or continuance.\18\
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\16\ 17 CFR 240.19h-1.
\17\ As a result of the Sarbanes-Oxley Act, persons found to
have violated certain state securities and insurance regulations and
banking laws are also now subject to statutory disqualification.
\18\ Under Rule 19h-1, a member organization willing to employ a
person subject to a statutory disqualification makes an application
to the Exchange for approval. If the Exchange approves the employing
firm's application, it would submit it to the Commission.
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In connection with a Rule 19h-1 filing made on behalf of an
individual, the various Exchange Divisions, including Member Firm
Regulation and Enforcement, review various documents, including a
description of the individual's proposed duties and responsibilities.
In conducting such reviews, the Exchange examines the circumstances
surrounding the statutory disqualification and requests verification
that all terms and conditions of the disqualification are met. Further,
the Exchange reviews the firm's disciplinary and examination history,
including any open matters before its Enforcement division. The purpose
of the review is to ensure that adequate supervisory procedures are in
effect. In connection with the Rule 19h-1 filing, the Exchange also
responds to comments by Commission staff.\19\
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\19\ In certain instances, the Commission may request additional
information or recommend that additional supervisory controls be in
place before approving an application.
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When such filings are made on behalf of an entity (e.g., a member
firm), the process is similar to what is described above. In addition,
the Exchange will request information from a firm as to what procedures
were put in place to prevent a recurrence, and/or verification of
payment of fines and/or compliance with an undertaking. The Exchange's
Enforcement Division reviews the filings/applications and documents in
making an evaluation into the nature of
[[Page 7822]]
the crime and/or offense committed by the statutory disqualification,
and where appropriate, conducts further background research, e.g.,
examining court decrees, in completing its review.
Currently, pursuant to NYSE Rule 346(f), when a member organization
seeks approval to remain or become associated with a person subject to
any statutory disqualification, the Exchange imposes a $1,000 fee for
filing the notice pursuant to Commission Rule 19h-1 under the Act.\20\
In instances, where the Exchange is not required to make such a notice
filing (e.g., clerical and ministerial persons engaged in securities
activities) but nevertheless reviews the request, it currently assesses
no fee. Although no fees are currently charged for such reviews, the
Exchange, as noted below, nevertheless incurs expenses in connection
with such reviews.
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\20\ See Securities Exchange Act Release No. 26674 (March 29,
1989), 54 FR 13801 (April 5, 1989) (SR-NYSE-88-45).
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As a result of costs associated with the development and
maintenance of a new system \21\ to track statutory disqualifications,
the increased cost of processing filings and the increased costs of
conducting examination oversight of statutory disqualifications, the
Exchange is proposing that a fee in the amount of $1,000 be charged in
instances where reviews are performed but a Rule 9h-1 filing is not
required.\22\ In instances where the Exchange is making the Rule 19h-1
filing, it is proposing that such fee be increased from $1,000 to
$1,500.\23\ The proposed fees of $1,000 and $1,500 are comparable to
those charged by NASD.\24\ The proposed fee increase would be effective
January 1, 2006.
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\21\ In May 2005, Member Firm Regulation implemented its new
Statutory Disqualification/Special Supervision (SD/SS) System to
track statutory disqualifications.
\22\ See Securities Exchange Act Release No. 25383 (February 23,
1988), 53 FR 6046 (February 29, 1988) (SR-NASD-88-3)
\23\ See Securities Exchange Act Release No. 34897 (October 26,
1994), 59 FR 54648 (November 1, 1994) (SR-NASD-94-57).
\24\ See supra notes 21 and 22.
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Regulatory Element Fee. NYSE Rule 345A provides in part, that no
member or member organization shall permit any registered person to
continue to, and no registered person shall continue to perform duties
as a registered person unless such person has complied with the
Regulatory Element \25\ continuing education requirements of NYSE Rule
345A.
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\25\ See NYSE Rule 345A(a).
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The Regulatory Element requires each subject registered person to
complete a standardized, computer-based, interactive continuing
education program within 120 days of their second registration
anniversary date and every three years thereafter, or as otherwise
prescribed by the Exchange. The purpose of this requirement is to help
ensure that registered persons are kept up-to-date on regulatory,
compliance, and sales practice-related industry rules and issues. There
are three Regulatory Element programs: The S201 Supervisor Program, the
S106 Series 6 Program, and the S101 General Program for Series 7 and
all other registrations. Persons who fail to complete the Regulatory
Element within the prescribed time frame are deemed inactive and may
not perform, nor receive compensation for, functions requiring
registration.
The Regulatory Element is a component of the Securities Industry
Continuing Education Program (``Program'') under NYSE Rule 345A. The
Securities Industry/Regulatory Council on Continuing Education
(``Council'')\26\ was organized in 1995 to facilitate cooperative
industry and regulatory coordination of the administration and future
development of the Program in keeping with applicable industry
regulations and changing industry needs. Its roles include recommending
and developing specific content and questions for the Regulatory
Element, defining minimum core curricula for the Firm Element component
of the Program, and developing and updating information about the
Program for industry-wide dissemination.
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\26\ The Council currently consists of 20 individuals, 14 of
whom are securities industry professionals associated with NASD
member firms and six of whom represent self-regulatory organizations
(the American Stock Exchange LLC, the Chicago Board Options
Exchange, Incorporated, the Municipal Securities Rulemaking Board,
NASD, the New York Stock Exchange, Inc., and the Philadelphia Stock
Exchange, Inc.).
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It is the Council's responsibility to maintain the Program on a
revenue neutral basis while maintaining adequate reserves for
unanticipated future expenditures.\27\ In December 2003, the Council
voted to reduce the Regulatory Element session fee from $65 to $60,
effective January 1, 2004, in order to reduce the reserves to a level
necessary to support current and expected programs and expenses. The
Council decided to review the reserve level and evaluate the Regulatory
Element session fee on an annual basis. The 2004 financial review and
evaluation produced no change in the Regulatory Element session fee. In
September 2005, the Council's annual financial review and evaluation
revealed that unless the Regulatory Element session fee were adjusted,
the Council's reserves were likely to be insufficient in 2006. The
reasons for the declining surplus are: (1) Lower than projected session
volume resulting in a significant decrease in actual revenue over
projected revenue; (2) higher delivery-related expenses beginning in
2006; and (3) costs associated with the rebuilding of
PROCTOR[supreg].\28\ At its September 2005 meeting, the Council voted
unanimously to increase the Regulatory Element session fee from $60 to
$75 effective January 1, 2006, in order to meet costs and maintain an
adequate reserve in 2006.\29\
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\27\ The Regulatory Element session fee was initially set at $75
when NASD established the continuing education requirements in 1995.
The session fee was reduced in 1999 to $65 and again in 2004 to $60.
The proposed increase returns the Regulatory Element session fee to
its original 1995 level.
\28\ PROCTOR[supreg] is an NASD technology system that supports
computer-based testing and training. The Regulatory Element program
uses PROCTOR[supreg] to package content, deliver, score and report
results, and maintain and generate statistical data related to the
Program.
\29\ See Securities Exchange Act Release No. 52947 (December 13,
2005), 70 FR 75517 (December 20, 2005) (SR-NASD-2005-132).
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The proposed implementation date is January 1, 2006.
2. Statutory Basis
The NYSE believes the proposed rule change is consistent with
section 6(b) of the Act,\30\ in general, and furthers the objectives of
section 6(b)(4)\31\ of the Act in particular, in that it is designed to
provide for the equitable allocation of reasonable dues, fees and other
charges among its members, and issuers and other persons using its
facilities.
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\30\ 15 U.S.C. 78f(b).
\31\ 15 U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition
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
NYSE has neither solicited nor received 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)(ii) of the Act \32\ and Rule
[[Page 7823]]
19b-4(f)(2) thereunder,\33\ because it establishes or changes a due,
fee, or other charge imposed by the Exchange. Accordingly, the proposal
will take effect upon filing with the Commission. At any time within 60
days of the filing of the 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.\34\
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\32\ 15 U.S.C. 78s(b)(3)(A)(ii).
\33\ 17 CFR 240.19b-4(f)(2).
\34\ The effective date of the original proposed rule change is
December 23, 2005, and the effective date of Amendment No. 1 is
February 2, 2006. For purposes of calculating the 60-day period
within which the Commission may summarily abrogate the proposed rule
change, as amended, under section 19(b)(3)(C) of the Act, the
Commission considers the period to commence on February 2, 2006, the
date on which the NYSE submitted Amendment No. 1. See 15 U.S.C.
78s(b)(3)(C).
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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, as amended, 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-NYSE-2005-92 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-2005-92. 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 the
filing also will be available for inspection and copying at the
principal offices 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-2005-92 and should be submitted on or before March
7, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\35\
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\35\ 17 CFR 200.30-3(a)(12).
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Jill M. Peterson,
Assistant Secretary.
[FR Doc. E6-2010 Filed 2-13-06; 8:45 am]
BILLING CODE 8010-01-P
