Document ID: SEC-2006-0947-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: New York Stock Exchange LLC
Posted Date: 2006-07-26T04:00Z

[Federal Register: July 26, 2006 (Volume 71, Number 143)]
[Notices]               
[Page 42434-42435]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26jy06-124]                         

[[Page 42434]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-54178; File No. SR-NYSE-2006-47]

 
Self-Regulatory Organizations; New York Stock Exchange LLC; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Requiring Member Organizations to Remit a Branch Office System 
Processing Fee in Connection with the Registration of Branch Offices 
via the Uniform Branch Office Registration Form Through the National 
Association of Securities Dealers, Inc.'s Central Registration 
Depository System

July 20, 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 June 30, 2006, the New York Stock Exchange LLC (``NYSE'' or 
``Exchange'') filed with the Securities and Exchange Commission 
(``SEC'' or ``Commission'') the proposed rule change as described in 
Items I, II and III below, which Items have been prepared by the 
Exchange.\3\ NYSE has designated this proposal as establishing or 
changing a due, fee, or other charge imposed by NYSE pursuant to 
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 from interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ CFR 240.19b-4.
    \3\ Pursuant to discussions with NYSE staff, the Commission has 
made clarifying changes throughout this notice. Telephone 
conversation between Stephen Kasprzak, Principal Counsel, and Cory 
Figman, Senior Special Counsel, Rule and Interpretive Standards, 
NYSE and Kate Robbins, Attorney, Division of Market Regulation 
(``Division''), Commission, on July 6, 2006 (``July 6 Telephone 
Conversation'').
    \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 Exchange proposes to require NYSE-only member organizations to 
remit to the National Association of Securities Dealers, Inc. 
(``NASD'') two fees in connection with branch offices processed via 
Form BR (Uniform Branch Office Registration Form) through NASD's 
Central Registration Depository (``CRD'') system. The fees, an initial 
$20.00 fee (``CRD Branch Office System Processing Fee'') and a $20.00 
annual fee (``CRD Annual Branch Office System Processing Fee''), are 
consistent with those paid by NASD-only and joint NYSE/NASD member 
organizations. The fees would be reflected in the amended NYSE Price 
List.\6\ The text of the proposed rule change is available on NYSE's 
Web site (http://www.nyse.com), at NYSE's Office of the Secretary, and 

at the Commission's Public Reference Room.
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    \6\ The Exchange clarified that the amendments to the NYSE 2006 
Price List would be inserted in the section entitled ``Registration 
& Regulatory Fees,'' in the subsection entitled ``Registration 
Fees,'' after the ``Branch Office Fee'' and before the ``Registered 
Persons'' fees. Telephone conversation between Cory Figman, Senior 
Special Counsel, NYSE and Kate Robbins, Attorney, Division, 
Commission, on July 12, 2006. In addition, the Exchange clarified 
that it intends to change the date on the NYSE Price List from 2005 
to 2006. See July 6 Telephone Conversation, supra note 3.
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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, 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.

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

1. Purpose
    The Exchange proposes to require NYSE-only member organizations to 
remit to NASD two conforming branch office system processing fees in 
connection with the registration of branch offices via Form BR through 
NASD's CRD system.

Background

    On September 30, 2005, the SEC approved the Exchange's proposed 
Form BR, which became effective on October 31, 2005.\7\ The Form BR 
replaces Schedule E of the Form BD, the NYSE Branch Office Application 
Form and certain state branch office forms. The Form BR enables firms 
to register branch offices electronically with NASD, NYSE, and states 
that require branch registration or reporting via a single filing 
through the CRD system. At the same time, the SEC approved a comparable 
NASD rule proposal.\8\
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    \7\ See Release No. 34-52543 (September 30, 2005), 70 FR 58771 
(October 7, 2005) (SR-NYSE-2005-13). See also NYSE Information Memo 
05-75.
    \8\ See Release No. 34-52544 (September 30, 2005), 70 FR 58764 
(October 7, 2005) (SR-NASD-2005-030). See also NASD Notice to 
Members 05-66.
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    Branch office registration through the CRD system creates 
efficiencies for firms by, among other things, making it easier for 
firms to register or report branch offices and to manage their ongoing 
registration and/or reporting responsibilities with regard to those 
branch offices. In addition to being able to submit a single filing to 
fulfill the branch office registration requirements of NASD, NYSE and 
the states, member organizations benefit from one centralized branch 
office system, online work queues, electronic notifications and other 
features available through the CRD system. Firms are also able to link 
their registered persons to the physical location from which they work 
via the Form BR, which not only aids regulators' examination efforts, 
but helps firms in meeting certain recordkeeping requirements.
    On May 23, 2006, NASD filed for immediate effectiveness a filing 
establishing an annual branch office system processing fee and waiver 
of the annual branch office system processing fee and the annual branch 
office registration fee for one branch office per member per year. \9\ 
The branch office system processing fee is set at $20.00 upon the 
registration of a branch office and $20.00 annually thereafter per 
registered branch. NASD will begin assessing the processing fee during 
the third quarter of 2006 for all branch offices in existence as of 
July 3, 2006.\10\ NASD will bill firms for all branch offices in 
existence as of July 3, 2006 via invoices, rather than through the CRD 
system.\11\ For any branch office that is registered on or after July 
3, 2006, NASD will assess and collect the branch office system 
processing fee through the CRD system at the time a firm registers a 
new branch office.\12\ Starting December 2006, all firms will be 
assessed $20.00 annually for each existing branch office as part of the 
CRD renewal program.\13\ In NASD's filing, it was noted that the manner 
of assessment and collection of branch office system processing fees 
from firms that are solely members of other self-regulatory 
organizations (``SROs'') that require their members to register branch 
offices via the Form BR would be addressed by other SROs.\14\
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    \9\ See Release No. 34-53955 (June 7, 2006), 71 FR 34658 (June 
15, 2006) (SR-NASD-2006-065).
    \10\ Id.
    \11\ Id.
    \12\ Id.
    \13\ Id.
    \14\ Id.

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[[Page 42435]]

    The proposed rule change would require NYSE-only members to remit 
to NASD a conforming initial $20.00 CRD Branch Office System Processing 
Fee and a conforming $20.00 CRD Annual Branch Office System Processing 
Fee in connection with branch offices processed via Form BR through the 
CRD system. These fees would be included on the NYSE Price List. The 
purpose of these branch office system processing fees is to recover the 
cost to NASD of developing and implementing the Form BR as well as for 
ongoing branch office system maintenance and enhancements.
2. Statutory Basis
    The Exchange believes that the proposed rule change is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities exchange, and in 
particular, with the requirements of Section 6(b)(4) of the Act,\15\ 
which requires the rules of an Exchange 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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    \15\ U.S.C. 78f(b)(4).
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B. Self-Regulatory Organization's Statement on Burden on Competition

    The Exchange believes that the proposed rule change does not 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

    Comments were neither solicited nor received.

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

    The proposed rule change has become effective pursuant to Section 
19(b)(3)(A)(ii) \16\ of the Act and paragraph (f)(2) of Rule 19b-4 
thereunder,\17\ in that it establishes or changes a due, fee, or other 
charge applicable to NYSE members.
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    \16\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \17\ 17 CFR 240.19b-4(f)(2).
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    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. 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 (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include 

File Number SR-NYSE-2006-47 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-2006-47. 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 (http://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 such 
filing also will 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 
File Number SR-NYSE-2006-47 and should be submitted on or before August 
16, 2006

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\18\
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    \18\ 17 CFR 200.30-3(a)(12).
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 J. Lynn Taylor,
 Assistant Secretary.
 [FR Doc. E6-11929 Filed 7-25-06; 8:45 am]

BILLING CODE 8010-01-P