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Self-Regulatory Organizations; Notice of Filing of Proposed Rule Change and Amendment No. 1 Thereto by the New York Stock Exchange, Inc. to Reduce Initial and Annual Branch Office Registration Fees, Retroactive to January 1, 2003, Charged to Member Organizations With More Than One Thousand Branch Offices

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Start Preamble September 25, 2003.

Pursuant to section 19(b)(1) [1] of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 19b-4 [2] thereunder, notice is hereby given that on August 21, 2003, the New York Stock Exchange, Inc. (“NYSE” or the “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 Exchange. On September 8, 2003, the Exchange filed Amendment No. 1 to the proposed rule change.[3] The Commission is publishing this notice to solicit 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 Changes

The Exchange proposes to amend its 2003 Price List to reduce its branch office registration fees for member organizations with more than one thousand branch offices.

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

In its filing with the Commission, the Exchange included statements concerning the purpose of, and basis for, 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 increased its registration and maintenance fees applicable to member organization branch offices, effective January 1, 2003.[4] The Exchange charges an initial fee upon the opening of a new branch office and an annual maintenance fee for each active branch office. A three-tiered fee structure is used for assessment of such fees in which a stepped-down rate is charged based on the applicable tier level. This structure provides an incremental reduction in fees for those branch offices that exceed the level of each breakpoint.

Prior to the January 1, 2003 increases, the following fee schedule was in effect for both initial and annual maintenance fees:

  • $250 for each of the first 250 branch offices;
  • $150 for each of the next 250 branch offices;
  • $125 for each branch office over 500.

The January 1, 2003 fee structure amendments resulted in the following schedule, which is currently in effect:

  • $350 for each of the first 1,000 branch offices;
  • $250 for each of the next 2,000 branch offices;
  • $225 for each branch office over 3,000.

Some member organizations have raised concerns regarding the current branch office fee schedule, contending it is unduly burdensome for certain business models, which have more offices than the average member firm but only one or two persons staffing each office.[5]

Start Printed Page 57498

In response to these concerns, the Exchange proposes reductions of initial and annual branch office fees, retroactive to January 1, 2003, as follows:

  • $350 for each of the first 1,000 branch offices (unchanged);
  • $150 for each of the next 2,000 branch offices (reduced from $250);
  • $125 for each branch office over 3,000 (reduced from $225).

2. Statutory Basis

The proposed rule change is consistent with the requirement under section 6(b)(4)[6] of the Exchange Act, which require that an exchange have rules that 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

The Exchange believes that the proposal does not impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act.

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

The Exchange did not receive or solicit any written comments on the proposed rule change.

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

Within 35 days of the date of publication of this notice in the Federal Register or within such longer period (i) as the Commission may designate up to 90 days of such date if it finds such longer period to be appropriate and publishes its reasons for so finding or (ii) as to which the self-regulatory organization consents, the Commission will:

A. By order approve such proposed rule change, or

B. Institute proceedings to determine whether the proposed rule change should be disapproved.

IV. Solicitation of Comments

Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposed rule change, as amended, is consistent with the Act. Persons making written submissions should file six copies thereof with the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW., Washington, DC 20549-0609. Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change 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 will also be available for inspection and copying at the principal office of the Exchange. All submissions should refer to File No. SR-NYSE-2003-24 and should be submitted by October 24, 2003.

Start Signature

For the Commission, by the Division of Market Regulation, pursuant to the delegated authority.[7]

Margaret H. McFarland,

Deputy Secretary.

End Signature End Preamble


3.  See letter from Darla C. Stuckey, Secretary, NYSE, to Nancy J. Sanow, Assistant Director, Division of Market Regulation, Commission, dated September 5, 2003 (“Amendment No. 1”). In Amendment No. 1, the Exchange replaced the original rule filing in its entirety, converted it from a 19(b)(3)(A) filing to a 19(b)(2) filing, and requested accelerated approval.

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4.  See Securities Exchange Act Release No. 47174; 68 FR 2606 (January 17, 2003) (SR-NYSE-2002-66).

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5.  Telephone call between Leah Mesfin, Attorney, Division of Market Regulation, Commission, and Mary Ann Furlong, Director, Rule and Interpretive Standards, NYSE on September 24, 2003.

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[FR Doc. 03-25075 Filed 10-2-03; 8:45 am]