[Federal Register Volume 59, Number 75 (Tuesday, April 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9317]


[[Page Unknown]]

[Federal Register: April 19, 1994]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33903; File No. SR-NASD-94-20]

 

Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by National Association of 
Securities Dealers, Inc. Relating to the Administration of the 
Association

April 13, 1994.
    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 8, 
1994, 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, II, and III below, which Items have been prepared by the NASD. 
The NASD has designated this proposal as one constituting an 
administrative matter under Section 19(b)(3)(A)(iii) of the Act, which 
renders the rule effective upon the Commission's receipt of this 
filing. 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

    The NASD is proposing a rule change to amend Schedule B to the NASD 
By-Laws\1\ to assign all U.S. Pacific territories and possessions to 
NASD District 2. Below is the text of the proposed rule change. 
Proposed new language is italicized.
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    \1\NASD Manual, Schedules to the By-Laws, Schedule B (CCH) 1772
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Schedule B to the By-Laws

    The number and territorial boundaries of the several districts 
established as provided in section 1 of Article VIII and the number of 
Governors elected from the several districts established as provided in 
Section 4(b) of Article VII of the By-Laws of the Corporation are as 
follows:
* * * * *
    District No. 2  In the State of California, that part of the State 
South or East of the Counties of Monterey, San Benito, Fresno and 
Inyo[;], and, in the State of Nevada, that part of the State South or 
East of the Counties of Esmeralda and Nye, and, all Pacific possessions 
and territories of the United States.
    One Governor shall be elected from and by the members of the 
Corporation eligible to vote in District 2.
* * * * *

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

    Under the Act, the NASD is obligated to ensure fair representation, 
of its members.\2\ Article VII, section 4(b) to the NASD By-Laws 
authorizes the Board to consider the fairness of the representation of 
members by the current administrative district structure\3\ and, 
whenever the Board finds unfairness in such representation, to change 
the number and boundaries of the administrative districts. Changes are 
necessary to the existing administrative district structure from time 
to time to address significant demographic shifts in the NASD's 
membership and to ensure fair and effective district representation on 
the Board. The Board noted that whereas the representation of District 
7 currently includes United States territorial possessions in the 
Caribbean, the Canal Zone and the Virgin Islands, no comparable 
representation exists for U.S. Pacific territories and possessions. The 
proposed rule change thus remedies this lack of representation by 
amending Schedule B to the By-Laws to assign all U.S. Pacific 
territories and possessions to NASD District 2.
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    \2\Section 15A(b)(4) of the Act requires that ``[T]he rules of 
the association [NASD] assure a fair representation of its members 
in the selection of its directors and administration of its affairs 
and provide that one or more directors shall be representative of 
issuers and investors and not be associated with a member of the 
association, broker, or dealer.''
    \3\For purposes of administration, the NASD has divided the 
United States, its territories and possessions into ``districts'' 
the boundaries of which are established by the Board of Governors.
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    The NASD believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(4) of the Act,\4\ which require that 
the rules of the Association provide for the fair representation of its 
members in the selection of its directors and administration of its 
affairs in that the proposed rule change ensures the fair 
representation of members in the district structure.
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    \4\15 U.S.C. 78o-3
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(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 foregoing rule change has become effective upon filing pursuant 
to Section 19(b)(3)(A)(iii) of the Act and subparagraph (e) of Rule 
19b-4 thereunder in that it constitutes solely an administrative matter 
of the Association.
    At any time within 60 days of the filing of a rule change pursuant 
to section 19(b)(3)(A) of the Act, the Commission may summarily 
abrogate the 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, 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 the file number in the caption 
above and should be submitted by May 10, 1994.

    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. 94-9317 Filed 4-18-94; 8:45 am]
BILLING CODE 8010-01-M