[Federal Register Volume 60, Number 137 (Tuesday, July 18, 1995)]
[Notices]
[Pages 36846-36847]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17520]



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[[Page 36847]]


SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35955; File No. SR-NASD-95-23]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by National Association of Securities Dealers, Inc., Relating to 
Gross Assessments

July 11, 1995.
    On May 23, 1995, the National Association of Securities Dealers, 
Inc. (``NASD'' or ``association'') filed with the Securities and 
Exchange Commission (``SEC'' or ``Commission'') a proposed rule change 
pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder.\2\ The proposed rule change 
amends Section 1 to Schedule A of the NASD By-Laws to clarify gross 
income filing requirements to include all revenue and to require all 
members to report revenue on a calendar year basis.

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
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    Notice of the proposed rule change, together with the substance of 
the proposal, was issued by Commission release (Securities Exchange Act 
Release No. 35795, June 1, 1995).\3\ No comment letters were received. 
The Commission is approving the proposed rule change.

    \3\ The proposal was originally filed with the Commission on May 
15, 1995. The NASD subsequently submitted Amendment No. 1 to the 
filing which amends the proposed rule to publish under Section 
19(b)(2) of the Act that portion of the proposed rule change that 
amends Section 1 to Schedule A to the NASD By-Laws and to publish 
under Section 19(b)(3)(A)(ii) of the Act that portion of the 
proposed rule change that amends Section 2 to Schedule A of the NASD 
By-Laws. Letter from Suzanne E. Rothwell, Associate General Counsel, 
NASD, to Mark P. Barracca, Branch Chief, Over-the-Counter 
Regulation, Division of Market Regulation, SEC, dated May 22, 1995. 
The NASD designated the part of this proposal for continuing 
education fees as one establishing or changing a fee under 
Sec. 19(b)(3)(A)(ii) of the Act, which rendered the rule effective 
upon the Commission's receipt of this filing.
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I. Background

    Recently, the NASD amended Section 5 of Schedule A to the By-Laws 
to define gross revenue for assessment purposes as income reported on 
the FOCUS report, with certain limited exclusions and deductions.\4\ 
The FOCUS report reports income on a calendar year basis. However, 
Section 1(a) of Schedule A was not amended when this change was enacted 
and still gives members the election to report on either a calendar 
year or fiscal year basis.

    \4\ See Securities Exchange Act Release No. 35074 (December 9, 
1994); 59 FR 64827 (December 15, 1994).
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II. The Terms of Substance of the Proposed Rule Change

    The NASD is amending Section 1(a) of Schedule A of the By-Laws to 
require all member firms to report annual gross revenue for assessment 
purposes on a calendar year basis. Each member is to report annual 
gross revenue as defined in section 5 of Schedule A, for the preceding 
calendar year.

III. Discussion

    The Commission believes that the rule change is consistent with the 
provisions of Section 15(A)(b)(5) of the Act \5\ which require that the 
rules of the Association provide for the equitable allocation of 
reasonable dues, fees, and other charges. The rule change provides a 
consistent basis for assessments among member firms by requiring all 
firms to report annual gross revenue on a calendar year basis. In 
addition, the rule change rectifies the current inconsistency between 
Sections 1 and 5 of Schedule A of the By-Laws.

    \5\ 15 U.S.C. 78o-3.
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    The Commission finds that the amendment will simplify the data 
collection and reporting process for the NASD.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change SR-NASD-95-23 be, and hereby is, 
approved.

    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. 95-17520 Filed 7-17-95; 8:45 am]
BILLING CODE 8010-01-M