[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