67104 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Notices

3See Amendment No. 1.

4 15 U.S.C. 78f(b).

5 15 U.S.C. 78f(b)(4).

6 15 U.S.C. 78s(b)(3)(A).

7 17 CFR 240.19b–4.

8 17 CFR 200.30–3(a)(12).

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization 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 self-regulatory organization 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 purpose of the proposed rule

change is to rebate to members an

amount equal to six months of

membership dues and an amount equal

to twelve months of floor telephone

booth and/or post space charges

applicable to them because the

Exchange has already adequately

covered its costs for the year.

The Exchange’s Finance Committee

has determined that the proposed

rebates would be consistent with the

general guidelines adopted by the

Committee with respect to the

appropriate level of capital and retained

earnings that the Exchange should

possess at any given time. Furthermore,

the Committee has focused on the

Exchange’s capitalization and

determined that even after the proposed

rebate, the Exchange will have ample

capital and resources to continue to

fulfill its proscribed duties in its

capacity as a self-regulator and as a

registered national securities exchange.3

2. Statutory Basis

The Exchange represents that

proposed rule change is consistent with

Section 6(b) of the Act,4 in general, and

furthers the objectives of Section

6(b)(4) 5 in particular, in that it provides

for the equitable allocation of reasonable

dues, fees, and other charges among the

Exchange’s 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 inappropriate burden on

competition.

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 constitutes

or changes a due, fee, or other charge

imposed by the Exchange and, therefore,

has become effective pursuant to

Section 19(b)(3)(A) of the Act 6 and

subparagraph (e) of Rule 19b–4

thereunder.7

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.

IV. Soliciation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, DC. 20549. 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 Commission’s Public Reference

Room. Copies of the filing also will be

available for inspection and copying at

the principal office of the Chicago Stock

Exchange, Inc. All submissions should

refer to File No. SR–CHX–97–31 and

should be submitted by January 13,

1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.8

[FR Doc. 97–33403 Filed 12–22–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39451; File No. SR–NASD–

97–88]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Incorporated Relating to

Process Fees on Members That Are

Parties to Arbitration Proceedings

December 15, 1997.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on December 11, 1997,

the National Association of Securities

Dealers, Incorporated ‘‘NASD’’ or

‘‘Association’’) 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 self-regulatory

organization. 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 Regulation is proposing to

amend Rule 10333 of the NASD’s Code

of Arbitration Procedure (‘‘Code’’) to

add a process fee on members that are

parties to arbitration proceedings. Below

is the text of the proposed rule change.

Proposed new language is in italics;

proposed deletions are in brackets.

10333. Member Surcharge and Process

Fees

(a) Each member [who is named as]

that is a party to an arbitration

proceeding, whether in a Claim,

Counterclaim, Cross-claim or ThirdParty Claim, shall be assessed a nonrefundable surcharge pursuant to the

schedule below when the Director of

Arbitration perfects service of the claim

naming the member on any party to the

proceeding. For each associated person

who is named, the surcharge shall be

assessed against the member or

members that employed the associated

person at the time of the events which

gave rise to the dispute, claim or

controversy. No member shall be

assessed more than a single surcharge in

any arbitration proceeding. The

surcharge shall not be [subject to

reimbursement] chargeable to any other

party under Rules 10332(c) and 10205(c)

of the Code.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Notices 67105

1The first two stages involved increasing the

surcharge on members named in arbitration

proceedings and increasing filing fees and hearing

session deposits. The increase in the member

surcharge was submitted to the SEC for approval in

rule filing SR–NASD–97–40 and was approved by

the SEC. It was implemented on July 1, 1997. The

proposed increases in filing fees and hearing

session deposits were originally submitted to the

SEC for approval in rule filing SR–NASD–97–39,

resubmitted in rule filing SR–NASD–97–79, and are

currently pending SEC approval.

2Forum fees are the charges for hearing sessions

assessed at the end of a proceeding. Forum fees are

calculated by multiplying the number of hearing

sessions by the applicable hearing session deposit.

3As discussed above, if an associated person of

a member is named, but the member employing the

associated person is not named, the process fee will

Continued

Amount in Dispute Surcharge

$.01–$2,500 .................................. $150

$2,500.01–$5,000 ......................... 200

$5,000.01–$10,000 ....................... 300

$10,000.01–$25,000 ..................... 400

$25,000.01–$30,000 ..................... 600

$30,000.01–$50,000 ..................... 800

$50,000.01–$100,000 ................... 1,000

$100,000.01–$500,000 ................. 1,500

$500,000.01–$1,000,000 .............. 2,000

$1,000,000.01–$5,000,000 ........... 2,500

$5,000,000.01–$10,000,000 ......... 3,000

Over $10,000,000 ......................... 3,600

(b) For purposes of this Rule, service

is perfected when the Director of

Arbitration properly serves the

Respondents to such proceeding under

Rule 10314 of the Code.

(c) If the dispute, claim, or

controversy does not involve, disclose,

or specify a money claim, the nonrefundable surcharge shall be $1,200 or

such greater or lesser amount as the

Director of Arbitration or the panel of

arbitrators may require, but shall not

exceed the maximum amount specified

in the schedule.

(d) Each member that is a party to an

arbitration proceeding will pay a nonrefundable process fee as set forth in the

schedule below for each stage of a

proceeding. The process fee shall not be

chargeable to any other party under

Rules 10332(c) and 10205(c) of the

Code. If an associated person of a

member is a party, the member that

employed the associated person at the

time of the events which gave rise to the

dispute, claim or controversy will be

charged the process fees. The

prehearing process fee will accrue

according to the schedule set forth

below, but will be due and payable

when the prehearing conference is held,

or, if no prehearing conference is held,

when the parties are notified of the date

and location of the first hearing session.

The hearing fee will accrue and be due

and payable when the parties are

notified of the date and location of the

first hearing session. All accrued but

unpaid fees will be due and payable at

the conclusion of the member’s or

associated person’s involvement in the

proceeding. No member will pay more

than one prehearing and hearing

process fee for any case. The process

fees will stop accruing when either the

member enters into a settlement of the

dispute or the member is dismissed

from the proceeding or, if the member

is paying a process fee as a result of an

associated person being named as a

party, when the associated person

enters into a settlement or is dismissed

from the proceeding, whichever is later.

Prehearing Process Fee Schedule

(proceedings where more than

$25,000 is in dispute)

Service of Claim (accrues when

the claim has been submitted

and is ready to be served on

the respondents) ....................... $50

Case Preparation (accrues when

the first answer to the claim is

received or due and discovery

and motions proceedings commence ........................................ 150

Prehearing Activities (accrues

when the parties are first notified of the names of any of the

arbitrators selected to hear the

matter or are given the names

of arbitrators to select) ............. 400

Total ...................................... $600

Hearing Process Fee Schedule (accrues

and becomes due and payable when

the parties are notified of the date

and location of the first hearing session)

Damages requested

Hearing

process

fee

$1–$30,000 ................................... $0

$30,000.01–$50,000 ..................... 1,000

$50,000.01–$100,000 ................... 1,500

$100,000.01–$500,000 ................. 2,500

$500,000.01–$1,000,000 .............. 3,500

$1,000,000.01–$5,000,000 ........... 4,500

More than $5,000,000 .................. 5,000

Unspecified .................................. 2,000

II. Self-Regulatory Organization’s

Statement of the Purpose of, and

Statutory Basis for, the Proposed Rule

Change

In its filing with the Commission, the

self-regulatory organization 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 self-regulatory organization 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

NASD Regulation is proposing to

amend Rule 10333 of the Code to add

a process fee to be charged to members

at several stages of arbitration

proceedings. The proposed rule change

is the last stage of a three stage effort to

make the NASD’s dispute resolution

program self-funding by charging fees to

participants in arbitration proceedings.1

The previously approved surcharge

and the other pending fee increases will

add approximately $12 million to the

revenue stream of the Office of Dispute

Resolution (‘‘Office’’). In addition, they

will shift much of the direct cost of

operating the dispute resolution forum

to the users of the forum. The final 1998

Budget for the Office, however, which

includes transfer pricing of services

provided by other NASD departments to

the Office, projects total expenses of

approximately $35.2 million versus

projected revenue of approximately

$29.1 million, leaving a revenue

shortfall of approximately $6.1 million.

The proposed fees are designed to

recover all of the Office’s costs that are

not recovered through filing fees,

hearing session deposits, forum fees,2

and member surcharges and to make the

Office’s activities self-funding in a

manner that generally reflects the extent

of the use of resources in a given case.

The process fees will be assessed in

two parts: (1) The Prehearing Process

Fee for the activities in the case from the

filing of the claim up to and including

the Prehearing Conference; and (2) the

Hearing Process Fee for the activities

relating to the evidentiary hearing,

award and case closing. If the member

concludes its involvement in a case

through dismissal or settlement, the

process fees accrued to that point will

be assessed. In addition, if an associated

person of a member is named in a

proceeding, but the member is not

named, the member employing the

associated person at the time of the

events that gave rise to the dispute will

be assessed the process fees when the

associated person’s involvement in the

case is concluded.

The Prehearing Process Fee will

accrue in three cumulative stages. When

a claim is filed, a $50 fee will accrue

against each member named in the

claim.3 When the first answer to the
67106 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Notices

accrue against the member employing the

associated person at the time of the events which

gave rise to the dispute. References in this rule

filing to fees assessed against members named in

the proceeding will also refer to the circumstance

where the member is not named in the proceeding,

but is assessed the fee because a present or, where

applicable, former associated person of the member

is named in the proceeding.

4As with the member surcharge, the proposed

process fees will be assessed only against members.

They will not be assessed against associated

persons. In addition, because the process fee will

be assessed against a member if an associated

person of the member is named in a proceeding,

members would be required to pay the process fee,

for example: (1) Where a member brings an

arbitration case against an associated person to

recover on an promissory note; (2) where an

associated person brings an arbitration case against

a member for defamation or wrongful discharge; or

(3) where a customer brings an arbitration case

against an associated person but does not name the

member that employed the associated person at the

time of the events that are the subject of the claim.

5 15 U.S.C. 78o–3.

6 15 U.S.C. 78s(b)(3)(A).

7 17 CFR 240.19b–4(e).

claim is received or due, an additional

$150 fee will accrue. Finally, when the

arbitrators are selected, a fee of $400

will accrue against each member in the

case, for a maximum assessment against

each member of $600. The Prehearing

Process fee will be due and payable

when the prehearing conference is held,

or, if no prehearing conference is held,

when the parties are notified of the date

and location of the first hearing. These

fees will not be dependent on the

amount of the claim.

The Hearing Process Fee will accrue

and become due and payable when the

parties are notified of the date and

location of the first hearing session. The

Hearing Process Fee will be a graduated

fee ranging from $1000 to $5000, based

on the amount in dispute.

If an associated person is named, the

member firm that employed the

associated person at the time the claim

arose will be assessed fees; however, a

member will only be assessed once for

each case even if both the member and

an associated person (or more than one

associated person) of the member are

named as respondents. 4

NASD Regulation believes that, by

structuring the process fees in the

manner proposed, the Office’s costs will

be recovered even if there are significant

variations in the number of cases that

proceed all the way through a hearing.

Moreover, NASD Regulation believes

that the proposed process fees may

encourage settlements because

significantly greater fees will be

incurred by members once the matter

proceeds to hearing.

2. Statutory Basis

NASD Regulation believes that the

proposed rule change is consistent with

the provisions of Section 15A(b)(5) of

the Act 5 in that the proposed rule

change provides for the equitable

allocation of reasonable charges among

members and other persons using the

Association’s arbitration facility and

requires member firm users to absorb a

reasonable share of the costs of

operating the arbitration program.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The NASD does not believe the

proposed rule change will impose any

burden on competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

No written comments were solicited

on received with respect to the

proposed rule change.

III. Date of Effectiveness of the

Proposed Rule Change and Timing for

Commission Action

The proposed rule change has become

effective upon filing pursuant to Section

19(b)(3)(A) of the Act 6 and

subparagraph (e) of Rule 19b–4

thereunder, 7 in that the proposal

constitutes a fee which the NASD

imposes on its members. At any time

within 60 days of the filing of such

proposed rule change, the Commission

may summarily abrogate such rule

change if it appears to the Commission

that such action is necessary or

appropriate in the public interest, for

the protection of investors, or otherwise

in furtherance of the purposes of the

Act.

IV. Solicitation of Comments

Interested persons are invited to

submit written data, views, and

arguments concerning the foregoing.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. 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 Commission’s Public Reference

Room. Copies of such filing will also be

available for inspection and copying at

the principal office of the NASD. All

submissions should refer to File No.

SR–NASD–97–88 and should be

submitted by January 13, 1998.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–33405 Filed 12–22–97; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF TRANSPORTATION

Coast Guard

[CGD08–97–045]

Lower Mississippi River Waterway

Safety Advisory Committee

AGENCY: Coast Guard, DOT.

ACTION: Notice of meeting.

SUMMARY: The Lower Mississippi River

Waterway Safety Advisory Committee

will meet to discuss various navigation

safety matters affecting the Lower

Mississippi River area. The meeting will

be open to the public.

DATES: The meeting will be held from 9

a.m. to approximately 11 a.m. on

Wednesday, January 28, 1998.

ADDRESSES: The meeting will be held in

the basement conference room of the

Hale Boggs Federal Building located at

501 Magazine Street, New Orleans,

Louisiana.

FOR FURTHER INFORMATION CONTACT:

M. Monty Ledet, USCG, c/o

Commander, Eighth Coast Guard

District (m), Room 1341, Hale Boggs

Federal Building, 501 Magazine Street,

New Orleans, LA 70130–3396,

telephone (504) 589–4686.

SUPPLEMENTARY INFORMATION: Notice of

this meeting is given pursuant to the

Federal Advisory Committee Act, 5

U.S.C. App. 2 § 1 et seq. The meeting is

open to the public. Members of the

public may present written or oral

statements at the meeting. The agenda

for the meeting consists of the following

items:

Election of Committee Chairman.

Election of Committee Vice Chairman.

Approval of the September 10, 1997

minutes.

Subcommittee Reports.

Old Business.

New Business.

Adjournment.

Information on Services for Individuals

with Disabilities

For information on facilities or

services for individuals with disabilities

or to request special assistance at the