[Federal Register Volume 59, Number 240 (Thursday, December 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-30852]
[[Page Unknown]]
[Federal Register: December 15, 1994]
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Part XI
Securities and Exchange Commission
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Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by National Association of
Securities Dealers, Inc. Relating to Assessments and Fees on Members
and Gross Income Assessments and Other Fees for Member Firms; Notices
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34; 35073; File No. SR-NASD-94-69]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by National Association of
Securities Dealers, Inc. Relating to Assessments and Fees on Members
December 9, 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 December
2, 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 establishing or changing a
fee under Section 19(b)(3)(A)(ii) of the Act, which renders the rule
effective upon the Commission's receipt of this filing.\1\ The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
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\1\The NASD has previously filed a proposed rule change to its
fee structure amending, inter alia, Section 1(d) of Schedule A (SR-
NASD-94-58). That amendment is scheduled to be effective January 1,
1995. The instant rule change is effective through December 31,
1994.
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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 A to the By-
Laws to adjust the amount of credit as set forth in Section 1(d) of
Schedule A, which is currently 62%, to 69%.
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
Pursuant to Article VI of its By-Laws, the NASD requires its
members to pay an annual assessment based on gross income as defined by
Schedule A, Section 1 to the By-Laws. The NASD also allows a credit
against such assessment pursuant to Subsection (d) to Section 1. The
NASD calculates the gross income assessment from the gross income
reported for the calendar or fiscal year preceding the NASD's calendar
budget year. Based on final gross income reports for 1993, the NASD
earlier in 1994 amended the amount of credit set forth in Section 1(d)
of Schedule A to the By-Laws from 59% to 62% to more closely reflect
the assessment revenue budgeted for 1994.\2\
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\2\See, Securities Exchange Act Release No. 34207 (June 13,
1994), 54 FR 3166 (June 20, 1994).
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However, because overall 1994 revenue for the NASD continues to
exceed budget projections, the NASD believes that the credit against
the gross income assessment should be raised from 62% to 69%. Based on
the forecast operating results for 1994 and final actual gross income
reports for 1993, the NASD is proposing to amend the credit to adjust
member assessments to reflect lower assessment revenue needed to fund
1994 operations. This proposed rule change, therefore, amends the
amount of credit set forth in Section 1(d) of Schedule A to the By-
Laws, which is currently 62%, to 69%, and applies the credit to the
entire 1994 calendar budget year to reflect the need for lower
assessment revenue for 1994. The practical effect of the proposed rule
change is that members will be assessed a smaller amount on 1993 gross
income to cover 1994 operating costs, and this amount will be realized
by members in 1995 in the form of a credit against 1995 assessments.
The NASD believes that the proposed rule change is consistent with
the provisions of Section 15A(b)(5) of the Act,\3\ which require that
the rules of the Association provide for the equitable allocation of
reasonable dues, fees and other charges among members in that the
proposed rule change equitably adjusts the 1994 assessment credit rate
based on the projected 1994 operating results and actual gross income
reports for 1993.
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\3\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)(ii) of the Act and Section (e) of Rule 19b-4
promulgated thereunder in that it constitutes a due, fee or other
charge.
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, N.W., Washington, D.C. 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 January 5, 1995.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\4\
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\4\17 CFR 20930-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-30852 Filed 12-14-94; 8:45 am]
BILLING CODE 8010-01-M