[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