[Federal Register Volume 61, Number 35 (Wednesday, February 21, 1996)]
[Notices]
[Pages 6674-6675]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-3842]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-36840; File No. SR-NASD-96-05]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change by National Association of Securities Dealers, Inc. Relating to 
the Mutual Fund Quotation Service

February 13, 1996.
    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 February 
5, 1996, 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.

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    The proposed rule change revises the fee structure for the Mutual 
Fund Quotation Service (``MFQS'' or ``Service'') and updates the name 
of the Service in the NASD Rules. Specifically, the proposed rule 
change amends Part VIII and Part XIV of Schedule D to the NASD By-
Laws.\1\ Below is the text of the proposed rule change. (Additions are 
italicized; deletions are bracketed.)

    \1\ Pursuant to a new rule numbering system for the NASD Manual 
anticipated to be effective no later than May 1, 1996, the rules 
that are the subject of this proposed rule change will become Rule 
7090 (regarding fee structure), and Rule 6800 (regarding 
description). See Exchange Act Release No. 36698 (January 11, 1996), 
61 FR 1419 (January 19, 1996) (order approving new rule numbering 
system).
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Part VIII

Schedule of NASD Charges for Services and Equipment
* * * * *
I. Mutual Fund Quotation Service [Program]
    Funds included in the Mutual Fund Quotation Service [Program] shall 
be assessed an annual fee of $275 [$150] per fund authorized for the 
News Media Lists and $200 [$100] per fund authorized for the 
Supplemental List. Funds authorized during the course of an annual 
billing period shall receive a proration of these fees, but no credit 
or refund shall accrue to funds terminated during an annual billing 
period. In addition, there shall be a one-time application processing 
fee of $250 for each new fund authorized.
* * * * *

Part XIV

Mutual Fund Quotation Service [Program]
A. Description
    The Mutual Fund Quotation Service [Program] collect and 
disseminates through The Nasdaq Stock Market prices for both mutual 
funds and money market funds.
B. Eligibility Requirements
    To be eligible for participation in the Mutual Fund Quotation 
Service [Program], a fund shall:
    1. through 4.--No change.
* * * * *

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 if 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 revise the free 
structure for the Mutual Fund Quotation Service to account for 
significant enhancements and to reflect more accurately the value of 
the Service in today's market. The Service facilities the public 
dissemination of daily price information for mutual funds and money 
market funds through broadcast media and newspapers. After the market 
close each day, mutual fund companies or their agents calculate the net 
asset value (``NAV''), and in some cases the dividend, capital gain, 
and other pertinent information for each fund. This information is 
submitted to the NASD by computer, which in turn disseminates it out to 
the media in a static batch transmission at approximately 5:40 p.m. 
Depending on the size and number of shareholders, funds may qualify for 
inclusion in either the News Media List or the Supplemental List.
    Under the proposed rule change, the fee for including a fund in the 
News Media List will increase from $150 to $275 per year, and the fee 
for the Supplemental List will increase from $100 to $200 per year. In 
addition, new funds will now be assessed a one-time application 
processing fee of $250 per fund.
    The NASD notes that the current fees have remained unchanged since 
inception of the Service more than ten years ago, while the number of 
funds and shareholder accounts have increased more than three-fold 
during the same period. The increased reliance on daily price 
information and the importance of distributing this information in a 
timely fashion has necessitated several enhancements to the Service, 
including the launch of a rolling dissemination system. Rolling 
dissemination of prices will allow mutual funds and their agents to 
enter real-time updates throughout the day, and enable the media to 
receive fund NAVs as soon as they are available. This gives the media 
more time to prepare their daily fund tables for inclusion in 

[[Page 6675]]
newspapers, and reduces the problems associated with rushed end-of-day 
transmissions of price information. In addition, rolling dissemination 
reduces the risk of the media not receiving any price information in 
the event there is a transmission problem between 4 p.m. and 5:40 p.m. 
In such a case, the media already will have received some fund 
information for publication, instead of relying on a single batch 
transmission at 5:40 p.m., as is the case today. The one-time 
application fee for new funds is intended to defray the costs incurred 
in processing applications.
    The NASD believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(5) of the Act, which requires that the 
rules of a national securities association provide for the equitable 
allocation of reasonable dues, fees, and other charges among members 
and issuers and other persons using any facility or system which the 
association operates or controls. The fee changes are necessary to 
provide significant benefits to mutual fund complexes, their agents, 
and the media.

(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

    Within 35 days of the date of 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, NW., Washington, DC 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 No. NASD-96-05 and should be 
submitted by March 13, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Director.
[FR Doc. 96-3842 Filed 2-20-96; 8:45 am]
BILLING CODE 8010-01-M