[Federal Register Volume 61, Number 62 (Friday, March 29, 1996)]
[Notices]
[Pages 14182-14183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7642]



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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37014; File No. SR-NASD-96-05]


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

March 22, 1996.
    On February 5, 1996, the National Association of Securities 
Dealers, Inc. (``SEC'' or ``Commission'') the proposed rule change 
pursuant to Section 19(b)(1)

[[Page 14183]]
of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 
thereunder.\2\ 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. Notice of the propose the 
rule change, together with the substance of the proposal, was issued by 
Commission release (Securities Exchange Act Release No. 36840, February 
13, 1996) and by publication in the Federal Register (61 FR 6674, 
February 21, 1996). No comment letters were received. The Commission is 
approving the proposed rule change.

    \1\ 15 U.S.C. 78s(b)(1) (1988).
    \2\ 17 CFR 240.19b-4.
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I. Background

    The purpose of the proposed rule change is to revise the fee 
structure for the Service to account for significant enhancements and 
to reflect more accurately the value of the Service in today's market. 
The Service facilitates the public dissemination of daily price 
information for mutual funds and money market funds through the 
broadcast media and the 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 quality for inclusion in 
either the News Media List or the Supplemental List.

II. The terms of Substance of the Proposed Rule Change

    The proposed rule change amends Part VIII and Part XIV of Schedule 
D to the NASD B-Laws.\3\ Under the proposed rule change, new mutual 
funds will be assessed a one-time application processing fee of $250 
per fund. In addition, the fee to include a fund in the News Media List 
will increase from $150 to $275 per year. The fee to include a fund in 
the Supplemental List will increase from $100 to $200 per year.

    \3\ 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 
of the Service). 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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III. Discussion

    The Commission 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 issues and other persons using any facility or system which 
the association operates or controls. The current fees have remained 
unchanged over a ten year period since inception of the Service, 
although the number of funds and shareholder accounts have increased 
more than three-fold. In addition, the one-time application fee for new 
funds is intended to defray the costs incurred in processing 
applications.
    The fee increases are necessary to provide benefits to mutual 
funds, their agents, and the media. Several enhancements to the 
Service, including the establishment of a system of rolling 
dissemination of prices, will improve the distribution to the media of 
price information in a timely fashion. Rolling dissemination of prices 
will allow mutual funds and their agents to enter real-time updates 
throughout the day which will decrease rushed end-of-day transmissions 
of price information. The media will have more time to prepare its 
daily fund tables for inclusion in newspapers because the media will be 
receiving fund NAVs when they are available. Furthermore, the public 
that has increased its reliance on daily price information will benefit 
from real-time updates of price information which reduce the risk that 
the media will not receive any price information for publication. If a 
transmission problem occurs between 4:00 p.m. and 5:40 p.m., 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 in 
the case today.
    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change SR-NASD-96-05 be, and hereby is, 
approved.

    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. 96-7642 Filed 3-28-96; 8:45 am]
BILLING CODE 8010-01-M