[Federal Register Volume 60, Number 137 (Tuesday, July 18, 1995)]
[Notices]
[Pages 36838-36842]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17582]



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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-35956; File No. SR-NASD-95-16]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by National Association of Securities Dealers, Inc. Relating to 
Amendment of the NASD Rules of Fair Practice Relating to a Customer 
Complaint Reporting Rule

July 11, 1995.
    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 July 6, 
1995,\1\ 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 Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.

    \1\ The proposed rule change was initially submitted on May 1, 
1995, but was amended twice prior to publication of this Notice; 
once on May 25, 1995, and again on July 6, 1995. The first amendment 
was a technical amendment intended to clarify the scope of the rule 
change. The second amendment added a time frame within which members 
would be responsible to report certain information. Both amendments 
are incorporated herein and are available for copying in the 
Commission's Public Reference Room.
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I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The NASD is proposing to amend the NASD Rules of Fair Practice to 
require NASD members to report to the NASD the occurrence of certain 
specified events and quarterly summary statistics concerning customer 
complaints. Below is the text of the proposed rule change. Proposed new 
language is italicized and deleted language is bracketed.

Rules of Fair Practice

Article III

Reporting Requirements

Section

    (a) Each member shall promptly report to the Association whenever 
such member or person associated with the member:
    (1) has been found to have violated any provision of any securities 
law or regulation, any rule or standards of conduct of any governmental 
agency, self-regulatory organization, or financial business or 
professional organization, or engaged in conduct which is inconsistent 
with just and equitable principles of trade; and the member knows or 
should have known that any of the aforementioned events have occurred;
    (2) is the subject of any written customer complaint involving 
allegations of theft or misappropriation of funds or securities or of 
forgery;
    (3) is named as a defendant or respondent in any proceeding brought 
by a regulatory or self-regulatory body alleging the violation of any 
provision of the Securities Exchange Act of 1934, or of any other 
federal or state securities, insurance, or commodities statute, or of 
any rule or regulation thereunder, or of any provision of the By-laws, 
rules or similar governing instruments of any securities, insurance or 
commodities regulatory or self-regulatory organization;
    (4) is denied registration or is expelled, enjoined, directed to 
cease and desist, suspended or otherwise disciplined by any securities, 
insurance or commodities industry regulatory or self-regulatory 
organization or is denied membership or continued membership in any 
such self-regulatory organization; or is barred from becoming 
associated with any member of any such self-regulatory organization;
    (5) is indicted, or convicted of, or pleads guilty to, or pleads no 
contest to, any criminal offense (other than traffic violations);
    (6) is a director, controlling stockholder, partner, officer or 
sole proprietor of, or an associated person with, a broker, dealer, 
investment company, investment advisor, underwriter or insurance 
company which was suspended, expelled or had its registration denied or 
revoked by any agency, jurisdiction or organization or is associated in 
such a capacity with a bank, trust company or other financial 
institution which was convicted of or pleaded no contest to, any felony 
or misdemeanor;
    (7) is a defendant or respondent in any securities or commodities-
related civil litigation or arbitration which has been disposed of by 
judgement, award, or settlement for an amount exceeding $15,000. 
However, when the member is the defendant or respondent, then the 
reporting to the Association shall be required only when such 
judgement, award, or settlement is for an amount exceeding $25,000;
    (8) is the subject of any claim for damages by a customer, broker, 
or dealer which is settled for an amount exceeding $15,000. However, 
when the claim for damages is against a member, then the reporting to 
the Association shall be required only when such claim 

[[Page 36839]]
is settled for an amount exceeding $25,000;
    (9) is associated in any business or financial activity with any 
person who is subject to a ``statutory disqualification'' as that term 
is defined in the Securities Exchange Act of 1934, and the member knows 
or should have known of the association. The report shall include the 
name of the person subject to the statutory disqualification and 
details concerning the disqualification;
    (10) is the subject of any disciplinary action taken by the member 
against any person associated with the member involving suspension, 
termination, the withholding of commissions or imposition of fines in 
excess of $2,500, or otherwise disciplined in any manner which would 
have significant limitation on the individual's activities on a 
temporary or permanent basis.
    (b) Each person associated with a member shall promptly report to 
the member the existence of any of the conditions set forth in 
paragraph (a) of this rule. Each member shall report to the Association 
not later than 10 business days after the member knows or should have 
known of the existence of any of the conditions set forth in paragraph 
(a) of this rule.
    (c) Each member shall report to the Association statistical and 
summary information regarding customer complaints in such detail as the 
Association shall specify by the 15th day of the month following the 
calendar quarter in which customer complaints are received by the 
member. For the purposes of this paragraph, ``customer'' includes any 
person other than a broker or dealer with whom the member has engaged, 
or has sought to engage, in securities activities, and ``complaint'' 
includes any written grievance by a customer involving the member or 
person associated with a member.
    (d) Nothing contained in paragraphs (a), (b) and (c) of this rule 
shall eliminate, reduce, or otherwise abrogate the responsibilities of 
a member or person associated with a member to promptly file with full 
disclosure, required amendments to Form BD, Forms U-4 and U-5, or other 
required filings, and to respond to the Association with respect to any 
customer complaint, examination, or inquiry.
    (e) Any member subject to substantially similar reporting 
requirements of another self-regulatory organization of which it is a 
member is exempt from the provisions of this rule.
* * * * *
Schedule C

Part V

[Disciplinary Actions]
[Every member shall promptly notify the Corporation in writing of any 
disciplinary action, including the basis therefor, taken by any 
national securities exchange or association, clearing corporation, 
commodity futures market or government regulatory body against itself 
or its associated persons, and shall similarly notify the Corporation 
of any disciplinary action taken by the member itself against any of 
its associated persons involving suspension, termination, the 
withholding of commissions or imposition of fines in excess of $2,500, 
or any other significant limitation on activities.]

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

    The purpose of the proposed rule change is to adopt an enabling 
rule which requires NASD members to report certain information on a 
timely basis to the NASD so that the NASD can more aggressively detect 
and investigate sales practice violations.
    In furtherance of the NASD's varied initiatives to address sales 
practice abuses and supervisory concerns, the NASD is proposing an 
amendment to Article III of the Rules of Fair Practice (Rules) to 
require members to report to the NASD the occurrence of specified 
events and quarterly summary statistics concerning customer complaints. 
The proposed rule would provide important new regulatory information 
that will assist the NASD in the timely identification of problem 
members, branch offices, and registered representatives in order to 
more aggressively detect and investigate sales practice violations. If 
adopted, the proposed rule would significantly parallel comparable 
provisions of existing Rule 351 of the New York Stock Exchange (NYSE).
    The NASD is concerned that critical material information identified 
in the proposed rule, such as reports on statutory disqualifications, 
internal disciplinary actions, and quarterly statistical data regarding 
customer complaints received by a member is not now required by Form U-
4 or other forms to be reported to the NASD. As such, this information 
is not available to the NASD staff on a routine, systematic, or timely 
basis. In this regard, the NASD believes that the affirmative 
obligation of members to provide the NASD with notice of certain events 
concerning member firms or their associated persons will significantly 
enhance the NASD's ability to quickly identify problem representatives 
and appropriately respond in a timely manner.
    The SEC supported the NASD adoption of a customer complaint 
reporting rule similar to NYSE Rule 351 in its Large Firm Project 
Report issued in conjunction with a cooperative effort involving the 
NASD, SEC, and NYSE that examined the hiring and retention practices of 
nine of the largest broker-dealers in the United States. Similarly, the 
General Accounting Office (GAO) in its report titled Securities 
Markets: Actions Needed to Better Protect Investors Against 
Unscrupulous Brokers, recommended that member firms' customer complaint 
information be computer captured and utilized as an additional tool by 
regulators for identifying potentially problem firms.
    As proposed, Subsection (a) of the rule requires member firms to 
file a report with the NASD when any of 10 different specified events 
occurs. These 10 events vary significantly, ranging from situations 
where a court, government agency, or self-regulatory organization (SRO) 
has determined there has been a violation of the securities laws, to 
circumstances where a firm has received a written customer complaint 
alleging theft or misappropriation of funds or securities, or forgery. 
Subsection (b) of the proposed rule requires each person associated 
with an NASD member to properly report to the member the existence of 
any of the 10 conditions set forth in Subsection (a) of the proposed 
rule. Subsection (b) also requires members to report to the NASD the 
existence of any of the conditions set forth in Subsection (a) not 
later than 10 business days after the member knows or should have known 
of the existence of such conditions.

[[Page 36840]]

    Subsection (c) of the rule further requires members to report to 
the NASD statistical and summary information regarding written customer 
complaints received by the member firm or relating to the firm or any 
of its associated persons. Importantly, Subsection (e) of the proposed 
rule eliminates the possibility of unnecessary regulatory duplication 
by providing an exemption from filing with the NASD for members already 
subject to similar reporting requirements of another SRO. NYSE Rule 351 
is the only such rule in place at this time.
    Currently, Part V of Schedule C to the NASD By-Laws requires 
members to promptly notify the NASD in writing of any disciplinary 
action that the member takes against any of its associated persons 
involving suspension, termination, the withholding of commissions, or 
imposition of fines in excess of $2,500, or any other significant 
limitation on activities. As this existing disclosure requirement is 
incorporated into the proposed rule in Subsection (a)(10), the NASD is 
proposing to rescind this part of Schedule C with the adoption of the 
new rule.
    Members will file the information required by this rule through the 
same data entry mechanism that is used for the electronic filing of 
FOCUS reports. The NASD will distribute to the members the software 
which will allow the members to file this information electronically.
    The NASD believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(6) of the Act in that the proposed new 
Rule of Fair Practice will improve the NASD's ability to detect and 
investigate sales practice violations. Pursuant to this statutory 
obligations, the NASD has proposed this rule change in order to 
establish a reporting mechanism for certain specified events which will 
enhance the NASD's regulatory efforts.

(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

    The Association received 25 letters commenting on Notice to Members 
94-95 (``the Notice''), the proposed amendment to the Rules of Fair 
Practice. Below is a summary of the more significant and/or recurring 
issues raised in the letters and the NASD's position in connection with 
the same.
    The NASD published Notice to Members 94-95 on December 15, 1994. 
The Notice requested member comment on a new Rule of Fair Practice 
which would require NASD members to report to the NASD the occurrence 
of certain specified events and quarterly summary statistics concerning 
customer complaints.
    Twenty-five comment letters have been received. Twenty-four of 
these are from NASD member firms or associations representing certain 
industry segments; e.g., the Securities Industry Association. One 
letter was received from a former registered person. Eight responses 
were against the rule proposal with comment, fifteen responses were in 
general agreement with the concept of the proposal, but with suggested 
modifications, and one letter supported the proposal. The remaining 
response requested a continuance to comment.
Overview of Comments

I. Form U-4 Reporting and the CRD System

    The common general criticism was that the proposed rule is somewhat 
duplicative of current reporting to the CRD through Form U-4. Also, a 
majority of commenters questioned the manner in which the required 
information would be collected and reported to the NASD. Similar 
comments were also made that the proposal is premature in view of the 
other ongoing initiatives involving the CRD redesign. As a result, some 
commenters suggest that this rule proposal be postponed until such time 
as the CRD redesign project is completed.
    Additionally, one commenter suggested that it seems overburdensome 
for members to provide another reporting channel for customer 
complaints under the proposed rule. Another commenter was concerned 
that the proposed rule would create a parallel database of the 
disciplinary history of registered representatives separate and 
distinct from the CRD system. Another commenter suggested that 
quarterly statistical information be reported through CRD.

II. Filing Format and Content

    Several commenters observed that the proposed rule fails to 
disclose actual information to be filed by the member, to whom at the 
NASD, and in what form. Further, several commenters asked how the 
information should be transmitted to the NASD.

III. Separate Reporting Obligations on Members and Registered Persons

    Several commenters noted that the proposed rule had separate 
reporting obligations for the member and the registered person. A 
number of commenters requested clarification on the member's obligation 
to independently determine the existence of any of the cited provisions 
regarding their registered persons, especially where the registered 
person may be the only known source of this information. As a result, 
one commenter suggested that the rule proposal should be modified to 
require disclosure of reported events upon ``obtaining knowledge'' and 
not the ``occurrence'' of the event.

IV. Public Versus Non-Public Availability of the Information

    Several commenters were confused as to whether the information 
submitted to the NASD would immediately, or at some future date, be 
provided to the public. As a result consistent with their understanding 
of the NYSE Rule 351 information, commenters suggested that the 
information remain confidential.

V. Breadth and Scope of the Proposed Rule

    Some commenters were concerned by the scope of the proposed rule 
and opined that the requested information goes beyond the state 
regulatory purposes.

Specific Comments

    The following specific comments will highlight the comments with 
respect to the various provisions of the proposed rule.

Section (a)(1)

    Several commenters stated that this section is overly broad by 
requiring reporting by any violation of ``rules or standards of 
conduct'' of any governmental entity, SRO, or business or professional 
organization. According to commenters, this would include violations of 
rules and regulations that have no relationship to securities 
activities or financial businesses. In this regard, one commenter 
suggested that the proposed provision should be revised to state that 
it only pertains to misconduct related to the financial services 
industry.

Section (a)(2)

    Most commenters on this provision were concerned that the proposed 
rule required the reporting of ``allegations'' of misconduct. A general 
view was that requiring a report based only on allegations, without 
permitting some 

[[Page 36841]]
initial evaluation or finding of reasonable cause, may lead to reports 
that are based on false information. This allegedly could result in 
damage to the reputation of members and associated persons who are 
innocent of wrongdoing. Therefore, commenters suggested that members be 
given an opportunity to screen customer complaints for veracity before 
filing, or to permit the filing of later reports to correct previously 
reported information after a member investigation.

Section (a)(3)

    Four comments were made on this provision. Two commenters suggested 
that the reporting of prospective legal action may lend underserved 
credibility to the accusations and may be prejudicial. In addition, one 
commenter stated that the proposal does not distinguish between minor 
and major violations and ventures into areas that are not within the 
jurisdiction of the NASD (i.e., insurance regulations, bank and trust 
company regulations).
    Lastly, one commenter suggested that the definition of 
``proceedings'' be defined and suggested adopting portions of the 
definition found on Form BD dealing with civil proceedings. The basis 
for the comment was to account for the differences among the various 
administrative procedures and regulatory processes of the 50 states, 
their agencies, and federal agencies and SROs.

Section (a)(4)

    Three commenters on this provision suggested that the member should 
not have to report these matters to a second database when the 
information is already reported through the CRD system. Another 
commenter requested clarification of whether an action had to reach a 
final order or adjudication before reporting to the NASD.

Section (a)(5)

    The majority of commenters to this section suggested that the 
proposed provision be revised to narrow the nature and range of 
offenses to securities related activities and determine a level of 
progression beyond arrest and arraignment before reporting to the NASD. 
In addition, several commenters suggested that current reporting under 
CRD system through Form U-4, question 22, is sufficient and was 
designed to obtain information that has a direct bearing on an 
individual's fitness to be employed in the securities industry.
Section (a)(6)

    Five commenters submitted comments on this provision. Two 
commenters suggested modifications to the proposed rule to restrict the 
provision's application to persons with a ``control relationship'' with 
the entity (i.e., director, controlling shareholder, partner, officer 
or sole proprietor). According to the commenters, it is reasonable to 
attribute some responsibility to the person if he or she is in a 
control or principal relationship with the entity, not if the person is 
solely ``associated'' with the entity. Another commenter suggested 
that, unless the registered person notified the member of its 
activities, it would be difficult to comply with this provision.

Sections (a)(7) and (a)(8)

    The commenters suggested that this provision required clarification 
for a number of specific fact situations. One commenter suggested that 
the reporting thresholds are too low for both the individual and the 
firm in today's litigious society and inflationary times, but did not 
provide any suggestions for alternate amounts.

Section (a)(9)

    Several commenters suggested that this proposed provision is too 
broad and does not support its stated purpose. Comments included the 
difficulty for registered persons and firms to make the required 
determination of whether a person is ``subject'' to a statutory 
disqualification. According to the commenters, a registered person may 
enter into a business relationship with an individual without knowledge 
that the person committed a felony, not involving securities or 
investments, within the past ten years.
    Other commenters suggested that the proposed provision should be 
modified to require reporting when a member or registered person 
``knows or learns'' of the relationship with a statutorily disqualified 
person.
    Two commenters suggested that it will be difficult for the member 
to comply without actual knowledge conveyed to them from the registered 
persons. One commenter suggested that the proposed provision is 
inconsistent with the intent to obtain information for the timely 
identification of problem broker-dealers and registered persons, in 
that, the information requested involved de minimis securities 
activities, non-securities business relationships, and similar 
situations.
    One commenter mentioned the proposed provision be expanded to 
include the requirement to report detail about the associated person's 
relationship with the statutorily disqualified person, such as, the 
nature of their business relationship.

Response to Comments

    The most significant concerns of the commenters focused on (1) 
duplicative reporting; (2) public availability of the data to be 
reported; (3) the reporting of unresolved customer complaints; (4) the 
reporting protocol; (5) member obligations to ensure that their 
associated persons disclose reportable events to them; (6) the 
reporting of a broad array of violations; and (7) reporting arrests.

Duplicative Reporting

    Many commenters did not recognize that existing reporting 
obligations, particularly through Form U-4, do not cover some of the 
most crucial information contained in the proposal. For example, Form 
U-4 does not and will not collect data on statutory disqualifications, 
internal disciplinary actions, or quarterly statistical data on 
customer complaints. Also, Form U-4 information is presently collected 
through the CRD system for registration and licensing purposes. That 
data is not available to the NASD staff on a routine, systematic, or 
timely basis for regulatory purposes and will not be available in the 
foreseeable future. On the other hand, the proposed rule is designed to 
separately collect data on a timely basis to substantially enhance 
regulatory initiatives relating to the detection of sales practice 
violations through the early identification of problem registered 
representatives. Significantly, the proposed rule squarely responds to 
SEC and GAO report recommendations. Those reports strongly urge the 
NASD to adopt a rule similar to NYSE Rule 351 for the purpose of 
enhancing sales practice initiatives and identifying problem registered 
representatives through the analysis of customer complaint patterns and 
other relevant information. Also responsive to concerns regarding 
duplicative reporting is the provision of the proposed rule which 
exempts members that have substantially similar reporting requirements 
to another SRO (i.e.: the NYSE under Rule 351). Further, upon 
implementation of the redesigned CRD which will provide more ready 
access to registration information, the NASD will undertake to review 
the proposed reporting rule to determine whether certain of the 
duplicative requirements may be eliminated. To the degree that such 
modifications are feasible, the NASD would intend to delete such 
provisions from the proposed rule.

[[Page 36842]]


Public Availability of Data

    A number of commenters clearly interpreted the proposed rule as 
permitting public disclosure of the information to be reported. 
However, the NASD collected data will not be made available to the 
public. The data will be used solely for regulatory purposes, an 
approach fully consistent with NYSE practices under Rule 351. This 
would not be the case if, as one commenter suggested, CRD was used to 
collect and store the customer complaint and other information. CRD 
data is generally available to the public by state regulators pursuant 
to disclosure statues. For this reason, it is imperative that a 
separate and private regulatory database be developed to collect and 
store the information.

Customer Complaint Reporting

    The proposed rule is designed to act as an early warning system for 
potential sales practice problems engaged in by identified registered 
representatives. To achieve this result, the information collected will 
be analyzed for, among other things, patterns of customer complaints 
involving member firms and registered persons, whether or not all of 
the complaints are ultimately substantiated. This data represents a 
core feature of the new rule. As highlighted in the SEC's Large Firm 
Project Report, identical data obtained through NYSE Rule 351 was a key 
component in developing the Large Firm Project's special examination 
list. Similar customer complaint data was also used extensively to 
focus the new, ongoing joint regulatory problem representative sweep. 
In this regard, the regulatory priorities relating to the collection of 
written customer complaint data outweighs concerns about reporting 
customer allegations of misconduct. Again, commenters are likely to be 
comforted on this issue once they fully recognize that unsubstantiated 
customer complaints will be solely used for regulatory purposes and not 
be made available to the public.

Reporting Protocol

    Concerns regarding the mechanics of the proposed rule will be 
addressed in subsequent Notices to Members. The staff has developed the 
specifications for electronic reporting that will facilitate the ease 
of data transmission by members and data collection by the NASD. The 
system specifications and the reporting protocol will be fully reported 
to the members via the Notice to Members and appropriate software will 
be provided.

Member Responsibility to Ensure Associated Person Disclosure

    Commenters expressed concern about a member's obligation to ensure 
compliance with the proposed rule where an associated person fails to 
disclose to the member the occurrence of an event specified in 
subsection (a)(9). A resolution surfaced in the comments by the 
suggestion that the rule proposal be modified to require member 
reporting under subsection (a)(9) only if the member obtains knowledge 
of the reportable event. Extending this concept to ensure that members 
do not intentionally avoid becoming aware of a reportable event, it was 
suggested that proposed subsection (a)(9) be modified to obligate 
member reporting under this item only if the member ``knows or should 
have known'' of the existence of the reportable event.

Violation Reporting

    Several commenters indicated that subsection (a)(1) information was 
too broad and should require reporting only after a finding of 
violation is made. Adopting this standard would add certainty to the 
proposed reporting obligation and clarify that members are not expected 
to launch independent inquiries to determine, for example, whether an 
associated person violated a provision of a business or professional 
organization. As a result, it was suggested that the rule proposal be 
modified to include language that a ``finding of violation'' is 
necessary before an occurrence needs to be reported under subsection 
(a)(1).

Arrest Reporting

    Comments arose under proposed subsection (a)(5) that included the 
reporting of arrests. Analysis of this issue indicates that the NASD 
may not have the authority to gain access to arrest records of an 
individual. Similarly, ``arraignment'' carries a different meaning 
among states and is not consistently an indication that a person has 
been charged with a crime. For these reasons, it was suggested that the 
proposal be modified to delete the term ``arrest'' and ``arraignment'' 
from the text.
    With regard to some of the specific comments raised, the NASD Board 
has amended the proposed rule in the following areas: (1) filings 
required pursuant to subsection (a)(1) are to be made only when there 
is a finding of violations; (2) ``arrest'' and ``arraignment'' are 
deleted from subsection (a)(5); and (3) filings required under 
subsection (a)(9) are to be made only where the member knows or should 
have known of the information to be reported.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Within 35 days of the publication of this Notice in the Federal 
Register or within such longer period (i) as the Commission may 
designate up to 90 days of such date if it finds such longer period to 
be appropriate and publishes its reasons for so finding or (ii) as to 
which the self-regulatory organization consents, the Commission will:
    A. By order approve such proposed rule change, or
    B. Institute proceedings to determine whether the proposed rule 
change should be disapproved.

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 file number SR-NASD-95-16 and 
should be submitted by August 8, 1995.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\2\

    \2\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-17582 Filed 7-17-95; 8:45 am]
BILLING CODE 8010-01-M