[Federal Register Volume 61, Number 88 (Monday, May 6, 1996)]
[Notices]
[Pages 20301-20302]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-11229]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37154; File No. SR-NASD-96-18]
Self-Regulatory Organizations; Notice of Filing and Order
Granting Accelerated Approval of Proposed Rule Change by National
Association of Securities Dealers, Inc. Relating to the Temporary
Extension of Effectiveness of Arbitration Procedures for Large and
Complex Cases
April 30, 1996.
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 April
30, 1996,1 the National Association of Securities Dealers, Inc.
(``NASD'' or ``Association'') filed with the Securities and Exchange
Commission (``SEC'' or ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
the NASD. The Commission is publishing this notice to solicit comments
on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ The NASD originally submitted the proposed rule change on
April 24, 1996. Amendment No. 1, submitted on April 29, 1996, states
that the Board of Directors of NASD Regulation, Inc. authorized the
filing of the proposed rule change with the Commission on April 26,
1996. Amendment No. 2, submitted on April 30, 1996, amends Rule
10334(h) to extend the effective date of that Rule to August 1,
1996.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The NASD is proposing to temporarily extend the effectiveness of
the arbitration Procedures for Large and Complex Cases, Rule 10334 of
the Code of Arbitration Procedure (``Code''),2 to August 1, 1996.
Below is the text of the proposed rule change. Proposed new language is
in italics; proposed deletions are in brackets.
---------------------------------------------------------------------------
\2\ Formerly Section 46 of the Code of Arbitration Procedure,
NASD Manual, Code of Arbitration Procedure, Art. III, Sec. 46 (CCH)
para. 3746.
---------------------------------------------------------------------------
Code of Arbitration Procedure
* * * * *
Procedures for Large and Complex Cases
Rule 10334
* * * * *
[[Page 20302]]
Temporary Effectiveness
(h) This Section 46 shall remain in effect [for one year from May
2, 1995] until August 1, 1996 unless modified or extended prior thereto
by the Board of Governors.
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 NASD 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 NASD 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
The Procedures for Large and Complex Cases, adopted effective May
2, 1995, for a one-year pilot test and codified at Rule 10334 of the
Code (formerly Section 46) will expire on May 2, 1996. Since Rule 10334
became effective, the Rule has been used on occasion by parties to
large and complex cases.
In addition, the NASD's Arbitration Policy Task Force, which issued
its report on ``Securities Arbitration Reform'' in January 1996, has
recommended that the one-year pilot test of Rule 10334 be extended in
order to permit the NASD to gather additional data and analyze the low
usage rate of the procedures.
The NASD believes that the proposed rule change is consistent with
the provisions of Section 15A(b)(6) of the Act 3 because it
permits the NASD to continue to specify procedures in the Code for
large and complex cases. This serves the public interest by enhancing
the satisfaction and perceived fairness of such proceedings by the
parties to such proceedings. To the extent the parties to such
proceedings express increased satisfaction with the resolution of
eligible matters, the goal of providing the investing public with a
fair, efficient and cost-effective forum for the resolution of disputes
is advanced.
---------------------------------------------------------------------------
\3\ 15 U.S.C. 78o-3.
---------------------------------------------------------------------------
(B) Self-Regulatory Organization's Statement on Burden on Competition
The NASD does not believe that the proposed rule change will result
in any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act, as amended.
(C) Self-Regulatory Organization's Statement on Comments on the
Proposed Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The NASD has requested that the Commission find good cause pursuant
to Section 19(b)(2) for approving the proposed rule change prior to the
30th day after publication in the Federal Register. The Commission
finds that the proposed rule change is consistent with the requirements
of the Act and the rules and regulations thereunder applicable to the
NASD and, in particular, the requirements of Section 15A and the rules
and regulations thereunder. The Commission finds good cause for
approving the proposed rule change prior to the 30th day after the date
of publication of notice of filing thereof in that accelerated approval
will benefit users of the arbitration process in that providing a
temporary extension of the procedures for large and complex cases will
permit arbitration participants to continue to use the procedures until
a one-year extension is submitted to the Commission for approval.
Rule 10334 expires by its terms on May 2, 1996. The NASD is asking
that the effectiveness of the Rule be temporarily extended until August
1, 1996, in order to permit the NASD to submit a proposed rule change
to extend the effectiveness of the rule for one year. In addition, the
application of the Rule to any case submitted to arbitration is
voluntary. Thus, extending the effectiveness of the Rule will not have
any adverse impact on the investing public.
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, NW., 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 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
NASD. All submissions should refer to SR-NASD-96-18 and should be
submitted by May 27, 1996.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change SR-NASD-96-18 be, and hereby is, approved
through August 1, 1996.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-11229 Filed 5-3-96; 8:45 am]
BILLING CODE 8010-01-M
