NASD Notice to Members 99-23 - March 1999

SEC Approves New Arbitration Fees; Effective March 18, 1999

Executive Summary

On February 16, 1999, the Securities and Exchange Commission (SEC) approved amendments to the fee schedules for customer and member arbitrations contained in Rules 10205 and 10332 of the National Association of Securities Dealers, Inc. (NASD®) Code of Arbitration Procedure (Code). This is the first increase in these fees since 1990. The filing fees and hearing session deposits are being increased to permit the NASD to cover more of its costs of operating the arbitration forum from revenue generated by the users of the forum; however, a large portion of the operating costs are covered by surcharges and other fees imposed only on members. In addition, even though filing fees and hearing session deposits are being increased, the small percentage of arbitration fee revenue paid by customers versus the large percentage paid by members will remain approximately the same as in the past. Arbitrator honoraria are also being increased in order to attract and retain qualified arbitrators willing to devote the time necessary to thoroughly consider arbitration claims.

The filing fee and hearing session deposit increases will be effective on March 18, 1999, for all cases filed on or after the effective date of the amendments. The arbitrator honoraria increases will be effective for arbitrators appointed to hear cases filed on or after the effective date of the amendments. The text of the amendments, including the new fee schedules, follows this Notice.

Questions regarding this Notice may be directed to Tom Wynn, Associate Director, Office of Dispute Resolution, NASD Regulation, Inc. (NASD RegulationSM) at (212) 858-4392; or Elliott R. Curzon, Assistant General Counsel, NASD Regulation, at (202) 728-8451.