[Federal Register Volume 61, Number 61 (Thursday, March 28, 1996)]
[Notices]
[Pages 13911-13912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7505]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37006; File No. SR-NASD-96-10]


Self-Regulatory Organizations; Notice of Filing and Immediate 
Effectiveness of Proposed Rule Change by National Association of 
Securities Dealers, Inc. Relating to the OTC Bulletin Board 
Service

March 21, 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 March 
13, 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 NASD has designated this proposal as one constituting 
a change to a due, fee, or other charge 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

    The proposed rule change amends Part VIII of Schedule D to the NASD 
By-Laws.\1\ The text of the proposed rule change is as follows. 
(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 rule that 
is the subject of this proposed rule change will become Rule 
7010(m). 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

A. System Services

* * * * *
14. OTC Bulletin Board Service
    The following charge shall apply to a broker-dealer that displays 
quotations or trading interest in the OTC Bulletin Board service:

Position charge--$6.00 [$5.00]/security/month

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 OTC Bulletin Board Service (``OTCBB'' or ``Service'') is an 
electronic quotation medium operated by the Nasdaq Stock market, Inc. 
that allows eligible members to enter, update, and retrieve quote 
information and unpriced indications of interest for non-Nasdaq 
securities. The purpose of this proposed rule change is to increase the 
OTCBB position charge from $5 to $6 per market maker position per 
month. The fee increase will be effective as of the beginning of 1996. 
This fee increase is intended to recover a portion of the costs of a 
number of enhancements to the Service since it was first launched in 
1990, as well as to recognize an increase in costs associated with the 
operation and regulation of the OTCBB.
    Specifically, several enhancements have been in place for over two 
years without any increase in fees to offset development, 
implementation, and maintenance costs. These include ACT trade 
reporting; real time display of high, low, close, previous close, and 
volume; OTCBB symbols programmable in the Nasdaq Workstation ticker; 
size requirements for priced issues; the admission of certain regional 
exchange-listed issues; nightly removal of stale foreign equity quotes; 
and expedited admission of delisted Nasdaq, NYSE and Amex issues, as 
well as qualifying issues from other quotation mediums.
    In addition, the NASD has submitted a filing with the Commission to 
permit the quotation of Direct Participation Program securities 
(``DPPs'') in the OTCBB, and to require transaction reporting for these 
securities. This will allow for a more centralized and transparent 
system for the quotation of DPPs, and will provide more efficient price 
discovery. Costs associated with

[[Page 13912]]
this initiative that already have been incurred include the creation 
and maintenance of a DPP ticker symbol database and directory for 
several thousand identifiable DPP issues.
    The NASD believes that the proposed rule change is consistent with 
the provisions of Section 15A(b)(5) \2\ of the Act. Section 15A(b)(5) 
specifies that the rules of a national securities association shall 
provide for the equitable allocations of reasonable dues, fees, and 
other charges among members, issuers, and other persons using any 
facility or system that the association operates or controls. The fee 
increase is the first since inception of the Service almost six years 
ago, and remains competitive with rates of the primary competitor.

    \2\ 15 U.S.C. Sec. 78o-3.
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(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 immediately pursuant 
to Section 19(b)(3)(A)(ii) of the Act and subparagraph (e) of Rule 19b-
4 thereunder in that it constitutes a change to a due, fee, or other 
charge.
    At any time within sixty (60) days of the filing of a proposed 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 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 file number in the caption 
above and should be submitted by April 18, 1996.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Jonathan G. Katz,
Secretary.
[FR Doc. 96-7505 Filed 3-27-96; 8:45 am]
BILLING CODE 8010-01-M