[Federal Register Volume 60, Number 226 (Friday, November 24, 1995)]
[Notices]
[Pages 58122-58123]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-28617]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36490; File No. SR-NASD-95-52]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by National Association of 
Securities Dealers, Inc. Relating to Gross Income Assessments for 
Member Firms

November 16, 1995.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''), 15 U.S.C. Sec. 78s(b)(1), notice is hereby given that on 
November 3, 1995, 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 Sec. 19(b)(3)(A)(ii) 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

    Pursuant to the provisions of Section 19(b)(1) under the Act, the 
NASD is herewith filing a proposed rule change to Section 1(c) of 
Schedule A to the NASD By-Laws to revise the credit allowed to members 
against the annual assessment on their gross income. Below is the text 
of the proposed rule change. Proposed new language is italicized; 
proposed deletions are in brackets.

Schedule A to the NASD By-Laws

    Assessments and fees pursuant to the provisions of Article VI of 
the By-Laws of the Corporation, shall be determined on the following 
basis.

Section 1--Assessments

    Each member shall pay an annual assessment composed of:
* * * * *
    (c) Members shall receive a credit against the annual assessment on 
gross income stated in paragraph (a) above as follows:
    (i) Portion of assessment > $5,000 - [25]23%
    (ii) Portion of assessment > $25,000 - [5]4% additional
    (iii) Portion of assessment > $50,000 - 5% additional
    (iv) Portion of assessment > $100,000 - [5]4% additional

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 the By-Laws of the Corporation, the NASD 
requires its members to pay an annual assessment fee, as defined by 
Schedule A, Section 1 to the By-Laws (``Schedule A''). NASD members are 
required under Section 1(a) of Schedule A to pay an amount equal to the 
greater of $850.00 or the total of a specified percentage of their 
annual gross income from securities transactions.\1\ NASD members also 
receive, pursuant to Section 1(c) of Schedule A, a credit against the 
annual assessment on their gross income imposed under Section 1(a) of 
Schedule A. The Schedule A, Section 1(c) credit to members is 
calculated by a tiered discount structure that is intended to address, 
to some extent, the regulatory subsidy provided by larger NASD firms.

    \1\ Schedule A, Section 1(a) requires NASD members to pay an 
amount equal to the greater of $850.00 or the total of: (i) 0.125% 
of annual gross revenue from state and municipal securities 
transactions; (ii) 0.125% of annual gross revenue from other over-
the-counter securities transactions; (iii) 0.125% of annual gross 
revenue from U.S. Government securities transactions; and (iv) with 
respect to members whose books, records and financial operations are 
examined by the NASD, 0.125% of annual gross revenue from securities 
transactions executed on an exchange.
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    The NASD recently has reviewed its fee structure in order to 
further align revenues with the cost of providing particular services 
to members. The proposed rule change would amend Section 1(c) of 
Schedule A to revise the credit allowed to members against the annual 
assessment on their gross income under Section 1(a) of Schedule A as 
follows:
    (i) Portion of assessment > $5,000 - [25]23%
    (ii) Portion of assessment > $25,000 - [5]4% additional
    (iii) Portion of assessment > $50,000 - 5% additional
    (iv) Portion of assessment > $100,000 - [5]4% additional
    The NASD believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(5) of the Act which require that the 
rules of the Association provide for the equitable allocation of 
reasonable dues, fees, and other charges in that the proposed rule 
change equitably adjusts fees and assessments to conform to the NASD's 
projected 1995 budget.

(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 subparagraph (e) of Rule 19b-
4 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 

[[Page 58123]]
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. Sec. 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 SR-NASD-95-52 and should be 
submitted by December 15, 1995.

    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. 95-28617 Filed 11-22-95; 8:45 am]
BILLING CODE 8010-01-M