[Federal Register Volume 62, Number 52 (Tuesday, March 18, 1997)]
[Notices]
[Pages 12866-12871]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6714]


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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-38380; File No. SR-NASD-97-11]


Self-Regulatory Organizations; Notice of Filing of Proposed Rule 
Change and Amendment No. 1 by National Association of Securities 
Dealers, Inc. Relating to the Release of Disciplinary Information

March 10, 1997.
    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 
11, 1997, the NASD Regulation, Inc. (``NASD Regulation'') filed with 
the Securities and Exchange Commission (``SEC'' or ``Commission'') the 
proposed rule change and on March 10, 1997, proposed Amendment No. 1. 
The proposed rule change and Amendment No. 1 are described in Items I, 
II, and III below, which Items have been prepared by NASD Regulation. 
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

    NASD Regulation is proposing to amend the Interpretation on the 
Release of Disciplinary Information in IM-8310-2 of the Rules of the 
National Association of Securities Dealers, Inc. (``NASD'' or 
``Association''). Below is the text of the proposed rule change. 
Proposed new text is in italics; deleted text is in brackets.

IM-8310-2  Release of Disciplinary Information \1\
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    \1\ The underlined language in paragraph (a) treats as if 
adopted the language changes already proposed in file SR-NASD-96-38. 
File SR-NASD-96-38 has been published for comment in Securities 
Exchange Act Release No. 37994 (November 27, 1996), 61 FR 64549 
(December 5, 1996).
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    (a) The Association shall, in response to a written inquiry, 
electronic inquiry, or telephonic inquiry via a toll-free telephone 
listing, release certain information [as] contained in its files 
regarding the employment and disciplinary history of members and their 
associated persons, including information regarding past and present 
employment history with Association members; all final disciplinary 
actions taken by federal, [or] state, or foreign securities agencies or 
self-regulatory organizations that relate to securities or commodities 
transactions; all pending disciplinary actions that have been taken by 
federal or state securities agencies or self-regulatory organizations 
that relate to securities and commodities transactions and are required 
to be

[[Page 12867]]

reported on Form BD or U-4 and all foreign government or self-
regulatory organization disciplinary actions that [are] relate to 
securities or commodities [related] transactions and are required to be 
reported on Form BD or U-4 and all criminal indictments, informations 
or convictions that are required to be reported on Form BD or Form U-4. 
The Association will also release information required to be reported 
on Form BD or Form U-4 concerning civil judgments and arbitration 
decisions in securities and commodities disputes involving public 
customers, pending and settled customer complaints, arbitrations and 
civil litigation, current investigations involving criminal or 
regulatory matters, terminations of employment after allegations 
involving violations of investment related statutes or rules, theft or 
wrongful taking of property, bankruptcies less than ten (10) years old, 
outstanding judgments or liens, any bonding company denial, pay out or 
revocation, and any suspension or revocation to act as an attorney, 
accountant or federal contractor.
    (b) The Association shall, in response to a request, release to the 
requesting party a copy of any identified disciplinary complaint or 
disciplinary decision issued by the Association or any subsidiary or 
Committee thereof; provided, however, that each copy of:
    (1) a disciplinary complaint shall be accompanied by [a] the 
following statement [that]: ``The issuance of a disciplinary complaint 
represents the initiation of a formal proceeding by the Association in 
which findings as to the allegations in the complaint have not been 
made and does not represent a decision as to any of the allegations 
contained in the complaint. Because this complaint is unadjudicated, 
you may wish to contact the respondent before drawing any conclusions 
regarding the allegations in the complaint.''
    (2) a disciplinary decision that is released prior to the 
expiration of the time period provided under the [Code of Procedure] 
Rule 9000 Series for appeal or call for review within the Association 
or while such an appeal or call for review is pending, shall be 
accompanied by a statement that the findings and sanctions imposed in 
the decision may be increased, decreased, modified, or reversed by the 
Association;
    (3) a final decision of the Association that is released prior to 
the time period provided under the [Securities Exchange] Act [of 1934] 
for appeal to the Commission or while such an appeal is pending, shall 
be accompanied by a statement that the findings and sanctions of the 
Association are subject to review and modification by the Commission; 
and
    (4) a final decision of the Association that is released after the 
decision is appealed to the Commission shall be accompanied by a 
statement as to whether the effectiveness of the sanctions has been 
stayed pending the outcome of proceedings before the Commission.
    (c) (1) The Association shall release to the public information 
with respect to any disciplinary complaint initiated by the Department 
of Enforcement of NASD Regulation, Inc., the NASD Regulation, Inc. 
Board of Directors, or the NASD Board of Governors containing an 
allegation of a violation of a designated statute, rule or regulation 
of the Commission, NASD, or Municipal Securities Rulemaking Board, as 
determined by the NASD Regulation, Inc. Board of Directors (a 
``Designated Rule''); and may also release such information with 
respect to any disciplinary complaint or group of disciplinary 
complaints that involve a significant policy or enforcement 
determination where the release of information is deemed by the 
President of NASD Regulation, Inc. to be in the public interest.
    (2) Information released to the public pursuant to subparagraph 
(c)(1) shall be accompanied by the statement required under 
subparagraph (b)(1).
    [(c)](d) (1) The Association shall [report to the membership and to 
the press pursuant to the procedures and at the times outlined herein 
any order of] release to the public information with respect to any 
disciplinary decision issued pursuant to the Rule 9000 Series imposing 
a suspension, cancellation or expulsion of a member: or suspension or 
revocation of the registration of a person associated with a member; or 
suspension or barring of a member or person associated with a member 
from association with all members; or imposition of monetary sanctions 
of $10,000 or more upon a member or person associated with a member; or 
containing an allegation of a violation of a Designated Rule; and may 
also release such information with respect to any disciplinary decision 
or group of decisions that involve a significant policy or enforcement 
determination where the release of information is deemed by the 
President of NASD Regulation, Inc. to be in the public interest. The 
[Board of Governors] National Business Conduct Committee (NBCC) may, in 
its discretion, determine to waive the [notice provisions set forth 
herein as to an order of imposition of monetary sanctions of $10,000 or 
more upon a member or person associated with a member,] requirement to 
release information with respect to a disciplinary decision under those 
extraordinary circumstances where [notice] the release of such 
information would violate fundamental notions of fairness or work an 
injustice.
    (2) Information released to the public pursuant to subparagraph 
(d)(1) shall be accompanied by a statement to the extent required for 
that type of information under subparagraphs (b)(2)-(4).
    [(d)] (e) If a decision [of a District Business Conduct Committee] 
issued pursuant to the Rule 9000 Series other than by the NBCC is not 
appealed to or called for review by the NBCC, the [order of the 
District Business Conduct Committee] decision shall become effective on 
a date set by the Association but not before the expiration of 45 days 
after the date of decision. [Notices of decisions imposing monetary 
sanctions of $10,000 or more or penalties of expulsion, revocation, 
suspension and/or the barring of a person from being associated with 
all members shall promptly be transmitted to the membership and to the 
press, concurrently; provided, however, no such notice shall be sent 
prior to the expiration of 45 days from the date of the said decision.]
    [(e)] (f) Notwithstanding paragraph [(d)] (e), expulsions and bars 
imposed pursuant to the provisions of Rules 9217 and 9226 shall become 
effective upon approval or acceptance by the [National Business Conduct 
Committee] NBCC, and [publicity] information regarding any sanctions 
imposed pursuant to those Rules may be [issued] released to the public 
pursuant to paragraph (d) immediately upon such approval or acceptance.
    [(f)](g) If a decision [of a District Business Conduct Committee] 
issued pursuant to the Rule 9000 Series is appealed to or called for 
review by the NASD Regulation, Inc. Board of [Governors] Directors or 
called for review by the NASD Board of Governors, [the order of the 
District Business Conduct Committee is] the decision shall be stayed 
pending a final determination and decision by the Board [and notice of 
the action of the District Business Conduct Committee shall not be sent 
to the membership or the press during the pendency of proceedings 
before the Board of Governors].
    [(g)](h) If a final decision of the Association is not appealed to 
the Commission, the sanctions specified in the decision (other than 
bars and expulsions) shall become effective on a

[[Page 12868]]

date established by the Association but not before the expiration of 30 
days after the date of the decision. Bars and expulsions, however, 
shall become effective upon issuance of the decision, unless the 
decision specifies otherwise. [Notices of decisions imposing monetary 
sanctions of $10,000 or more or penalties of expulsion, revocation, 
suspension and/or the barring of a person from being associated with 
all members shall promptly be transmitted to the membership and to the 
press concurrently; provided, however, that any notice shall be sent 
prior to the expiration of 30 days from the date of a decision imposing 
sanctions other than expulsion, revocation, and/or the barring of a 
person from being associated with all members].
    [(h)](i) If a decision of the [Board of Governors] Association 
imposing monetary sanctions of $10,000 or more or a penalty of 
expulsion, revocation, suspension and/or barring of a member from being 
associated with all members is appealed to the Commission, notice 
thereof shall be given to the membership and to the press as soon as 
possible after receipt by the Association of notice from the Commission 
of such appeal and the Association's notice shall state whether the 
effectiveness of the Board's decision has [or has not] been stayed 
pending the outcome of proceedings before the Commission.
    [(i)](j) In the event an appeal to the courts is filed from a 
decision by the Commission in a case previously appealed to it from a 
decision of the [Board of Governor] Association, involving the 
imposition of monetary sanctions of $10,000 or more or a penalty of 
expulsion, revocation, suspension and/or barring of a member from being 
associated with all members, notice thereof shall be given to the 
membership as soon as possible after receipt by the Association of a 
formal notice of appeal. Such notice shall include a statement [that] 
whether the order of the Commission has [or has not] been stayed.
    [(j)](k) Any order issued by the Commission of revocation or 
suspension of a member's broker/dealer registration with the 
Commission; or the suspension or expulsion of a member from the 
Association; or the suspension or barring of a member or person 
associated with a member from association with all broker/dealers or 
membership; or the imposition of monetary sanctions of $10,000 or more 
shall be [made known to the membership of the Association] released to 
the public through a notice containing the effective date thereof sent 
as soon as possible after receipt by the Association of the order of 
the Commission.
    [(k)](l) Cancellation of membership or registration pursuant to the 
Association's By-Laws, Rules and Interpretative Material shall be [sent 
to the membership and, when appropriate, to the press] released to the 
public as soon after the effective date of the cancellation as 
possible.
    [(l)](m) [Notices to the membership and r] Releases to the [press] 
public referred to in paragraphs (c) and (d) above shall identify the 
Rules and By-Laws of the Association or the SEC Rules violated, and 
shall describe the conduct constituting such violation. [Notices] 
Releases may also identify the member with which an individual was 
associated at the time the violations occurred if such identification 
is determined by the Association to be in the public interest.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NASD Regulation 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. NASD Regulation 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

1. Purpose
    The NASD's Public Disclosure Program (``Program'') currently 
provides through the Central Registration Depository (``CRD'') a 
synopsis of all pending NASD disciplinary information regarding members 
and associated persons, including information on disciplinary 
complaints \2\ when they are issued by the Association and disciplinary 
decisions when they are issued by any Committee or Board of the 
Association. Recently, the SEC approved an amendment that also requires 
the Association to provide copies of disciplinary complaints and 
decisions upon request.\3\
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    \2\ This rule filing relates to ``disciplinary complaints,'' and 
does not address ``customer complaints.''
    \3\ See, Securities Exchange Act Release No. 37797 (October 9, 
1996); 61 FR 53984 (October 16, 1996).
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    The Interpretation on the Release of Disciplinary Information 
(``Interpretation''), contained in IM-8310-2,\4\ currently permits the 
Association to issue information regarding certain specified 
significant disciplinary decisions when they become final.\5\ The 
specified decisions are those that impose sanctions of a suspension, 
bar or fine of $10,000 or more.
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    \4\ The Interpretation was previously cited as ``Resolution of 
the Board of Governors--Notice to Membership and Press of 
Suspensions, Expulsions, Revocations, and Monetary Sanctions and 
Release of Certain Information Regarding Disciplinary History of 
Members and Their Associated Persons'' and appeared after paragraph 
2301 of the NASD Manual, following Article V, Section 1 of the Rules 
of Fair Practice.
    \5\ The publication of information is normally done through a 
monthly press release containing information about significant 
disciplinary actions that have become final during the preceding 
month. In addition, a more detailed press release may be issued on a 
more expedited basis about a case of particular importance.
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    As the Program has expanded to provide through CRD a synopsis of 
all pending NASD disciplinary information regarding members and 
associated persons, including information on the filing of disciplinary 
complaints, concerns have arisen that there is a disparity of access to 
information. Those individuals that are not familiar with the Program 
are not apprised by NASD publication to the membership and the press of 
the issuance of a significant complaint regarding a member or 
associated person with whom the individual., does business. Moreover, 
although individuals that are aware of the Program can obtain 
information on any NASD disciplinary decision from CRD, the current 
provisions of IM-8310-2 do not permit the Association to be proactive 
in providing notification to the membership and the press of non-final 
disciplinary decisions and does not permit the Association to also 
publicize other (final and non-final) disciplinary decisions that do 
not meet the current publication criteria but nonetheless involve a 
significant policy or enforcement issue that should be brought to the 
attention of the public.
    In considering this issue, NASD Regulation believes that the 
interests of the public in obtaining improved access to information 
concerning significant disciplinary matters must be balanced against 
the legitimate interests of respondents not to be subject to unfair 
publicity concerning unadjudicated allegations of violations (i.e., 
complaints) and non-final determinations of violations (i.e., non-final 
decisions). The proposed rule change seeks to balance these interests 
by providing for publicity at the

[[Page 12869]]

Association's initiative of those disciplinary matters that could most 
significantly affect investor interests and by enhancing the disclosure 
accompanying the release of disciplinary complaints. NASD Regulation 
is, therefore, proposing to amend IM-8310-2 to authorize the 
Association to release information on those disciplinary complaints 
that: (1) contain an allegation of violation of significant designated 
SEC, NASD, or Municipal Securities Rulemaking Board (``MSRB'') \6\ 
rules; or (2) the President of NASD Regulation determines should be 
publicized in the public interest. In addition, the Association would 
be authorized to release information on final and non-final 
disciplinary matters that: (1) meet the current criteria for 
significant disciplinary decisions; (2) meet the specific criteria 
proposed for disciplinary complaints, or (3) the President of NASD 
Regulation determines should be publicized in the public interest.
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    \6\ NASD Regulation maintains the authority and responsibility 
to enforce compliance with MSRB rules with respect to member firms.
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Notice of Disciplinary Complaints

    NASD Regulation is proposing to amend IM-8310-2 to authorize the 
Association to release information on those disciplinary complaints 
that present the most significant investor protection issues, i.e., 
violations of anti-fraud, anti-manipulation, and sales practices rules 
that impact investors. New paragraph (c) to IM-8310-2 would authorize 
the Association to release to the public information on NASD-initiated 
\7\ disciplinary complaints that contain an allegation of a violation 
of a specifically identified statute, rule or regulation of the SEC, 
NASD, or MSRB that is determined by the NASD Regulation Board of 
Directors to involve serious misconduct that affects investors 
(``Designated Rules''). NASD Regulation is proposing to adopt a list of 
Designated Rules that includes only those SEC, NASD, and MSRB rules 
that prohibit significant fraudulent activity or egregious conduct. 
Following is the list of Designated Rules that relate to complaints as 
to which information would be automatically released:
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    \7\ With respect to the methodology for the release of 
information on complaints and decisions, it is anticipated that 
information will be released through an omnibus press release (that 
is subsequently included in an NASD Notice to Members), a press 
release on an individual matter, or through the NASD Regulation 
WebSite.

                                            List of Designated Rules                                            
----------------------------------------------------------------------------------------------------------------
                                                                                                                
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                                                   Sec Rules                                                    
----------------------------------------------------------------------------------------------------------------
Rule 10b-5.............................................  Employment of Manipulative and Deceptive Devices.      
Rules 15g-1 to 15g-9...................................  Sales Practice Requirements for Certain Low-Priced     
                                                          Securities (Penny Stock Rules).                       
Section 17(a)..........................................  Fraudulent Interstate Transactions.                    
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                                                   NASD Rules                                                   
----------------------------------------------------------------------------------------------------------------
                        Rule No.                                                  Title                         
----------------------------------------------------------------------------------------------------------------
2110...................................................  Standards of Commercial Honor and Principles of Trade. 
                                                          (Only if the complaint alleges unauthorized trading,  
                                                          churning, conversion, material misrepresentations or  
                                                          omissions to a customer, front-running, trading ahead 
                                                          of research reports, excessive mark-ups).             
2120...................................................  Use of Manipulative, Deceptive, or Other Fraudulent    
                                                          Devices.                                              
2310...................................................  Recommendations to Customers (Suitability).            
2330...................................................  Customers' Securities or Funds.                        
2440...................................................  Fair Prices and Commissions.                           
3310...................................................  Publication of Transactions and Quotations.            
3330...................................................  Payment Designed to Influence Market Prices, Other than
                                                          Paid Advertising.                                     
----------------------------------------------------------------------------------------------------------------
                                                   MSRB Rules                                                   
----------------------------------------------------------------------------------------------------------------
                          Rule                                                    Title                         
----------------------------------------------------------------------------------------------------------------
Rule G-19..............................................  Suitability of Recommendations and Transactions.       
Rule G-30..............................................  Prices and Commissions (Mark-ups).                     
Rules G-37 (b) & (c)...................................  Political Contributions and Prohibitions on Municipal  
                                                          Securities Business.                                  
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    This list of Designated Rules would be included in the Notice to 
Members announcing SEC approval of this proposed rule change. In the 
future, any changes to the list will be published by the Association in 
a Notice to Members, after approval by the Board.
    For the same reasons that support the release of information 
concerning complaints, NASD Regulation also believes that the 
Association should have authority to release information on 
disciplinary complaints that contain allegations of violations of other 
rules and regulations not included on the list of Designated Rules but 
that nonetheless involved serious misconduct that could affect 
investors. It is, therefore, also proposed that new subparagraph (c)(1) 
to IM-8310-2 include a provision that would grant authority to the 
President of NASD Regulation to issue information on ``any complaint or 
group of complaints'' that involve a significant policy or enforcement 
determination where the release of the information is deemed to be in 
the public interest.
    In order to ensure that appropriate disclosures accompany 
information on any disciplinary complaint, NASD Regulation is also 
proposing to require in new subparagraph (c)(2) of the Interpretation 
that any disciplinary complaint be accompanied by disclosure regarding 
the status of the complaint. Subparagraph (b)(1) of the

[[Page 12870]]

Interpretation currently requires disclosure that ``the issuance of a 
disciplinary complaint represents the initiation of a formal proceeding 
by the Association in which findings as to the allegations in the 
complaint have not been made and does not represent a decision as to 
any of the allegations contained in the complaint.'' The proposed 
amendment would expand this disclosure to include the following 
statement: ``Because this complaint is unadjudicated, you may wish to 
contact the respondent before drawing any conclusions regarding the 
allegations in the complaint.'' NASD Regulation believes that this 
disclosure will help to enable recipients of the information to view it 
in an appropriate context and, thereby, provide appropriate protections 
to the respondent.

Notice of Non-Final Disciplinary Decisions

    With respect to non-final disciplinary decisions, NASD Regulation 
is proposing to amend the Interpretation to require that the current 
significance test for release of information on final decisions also be 
applied to the release of information on non-final decisions--with the 
additional requirement that non-final decisions be accompanied by 
appropriate disclosures as to the status of the case. It is proposed, 
therefore, that current paragraph (c) of the Interpretation be amended 
to be redesignated as subparagraph (d)(1) and to delete the provisions 
that currently prevent the Association from releasing information on 
non-final disciplinary decisions. As a result of these changes, the 
Association would be authorized to release information on non-final 
disciplinary decisions that impose monetary sanctions of $10,000 or 
more or penalties of expulsion, revocation, suspension, or a bar from 
being associated with members firms.
    In addition, redesignated subparagraph (d)(1) is proposed to be 
amended to require that information on all non-final and final 
decisions that contain an allegation of a Designated Rule be released, 
regardless of the extent of the sanction or whether any sanction had, 
in fact, been imposed. NASD Regulation believes that where information 
on a disciplinary complaint is released because it includes an 
allegation of violation of one or more Designated Rules, information on 
the decision involving the same matter should also be released based on 
the same public policy interests that justify the release of complaint 
information--regardless of whether the decision results in the finding 
of a violation and the imposition of sanctions, a dismissal of the 
allegation, or a reversal of earlier findings.
    Moreover, consistent with the same provision proposed in 
subparagraph (c)(1), it proposed that renumbered subparagraph (d)(1) be 
amended to authorize the President of NASD Regulation to release 
information on ``any decision or group of decisions'' that involve a 
significant policy or enforcement determination where the release of 
the information is deemed to be in the public interest.
    Renumbered subparagraph (d)(1) allows a waiver of the release of 
information in a particular case where the release of information would 
be deemed to violate fundamental notions of fairness or work an 
injustice. NASD Regulation is proposing to amend this provision to 
transfer the authority to grant exceptions from the Board of Governors 
of the NASD to the National Business Conduct Committee (``NBCC''), in 
order to facilitate consideration of any application for an exception 
pursuant to the standard NBCC review procedures for motions by 
respondents.
    Finally, NASD Regulation is proposing to add new subparagraph 
(d)(2) to require that the information required by subparagraphs 
(b)(2)-(4) accompany such a non-final decision, thereby providing 
appropriate disclosures regarding the status of any non-final 
disciplinary decision.

General

    The Interpretation is proposed to be amended to replace references 
to the ``membership and the press'' with a general reference requiring 
the ``public'' release of information on complaints and decisions. Such 
a general reference will permit the Association to choose any 
appropriate methodology to release information in an environment where 
the methodologies for informing the public are changing frequently. It 
is believed that the current focus of the Interpretation on releasing 
information ``to the membership and the press'' makes a distinction 
between forms of publication that is no longer meaningful.\8\
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    \8\ At the time this language was originally adopted, it was 
most likely assumed that only NASD members would have access to 
information published to the membership and the general public would 
have access to such information only through the press. Today, NASD 
Notices to Members that contain information on disciplinary 
decisions and cancellations of membership are available through a 
number of electronic third-party vendors, including LEXIS, with the 
result that persons outside of the membership have the same access 
to releases to the ``membership'' as they do to information 
published by the press. It is also anticipated that the 
Association's WebSite on the Internet will post information that was 
previously issued through press releases and Notices to Members, 
further blurring the distinction between these two forms of 
publication. Finally, the ``press'' now makes information available 
to the public through different technologies, including broadcast 
and computer-accessed media.
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    Moreover, renumbered subparagraphs (e), (g), and (h) are proposed 
to be amended to delete current language prohibiting the release of 
information until the expiration of the time for appeal or call for 
review or during the pendency of any appeal. As a result of these 
changes, the Association will be permitted to release information on 
non-final disciplinary decisions pursuant to the standards adopted in 
new subparagraph (d)(1).
    Other conforming amendments are proposed to renumbered 
subparagraphs (e)-(m).

Implementation of Proposed Rule Change

    NASD Regulation is proposing that the proposed rule change be 
effective 30 days after the date a Notice to Members is issued 
announcing adoption of the proposed rule change and containing the list 
of Designated Rules. The Notice to Members will be issued within 45 
days of SEC approval.
2. Statutory Basis
    NASD Regulation believes that the proposed rule change is 
consistent with the provisions of Section 15A(b)(6) of the Act \9\ in 
that the proposed rule change to expand the Association's authority to 
release information on significant disciplinary complaints and 
significant final and non-final disciplinary decisions is consistent 
with the Association's obligations to protect investors and the public 
interest.
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    \9\ 15 U.S.C. Sec. 78o-3.
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(B) Self-Regulatory Organization's Statement on Burden on Competition

    NASD Regulation 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

[[Page 12871]]

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, 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. 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 8, 1997.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\10\
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    \10\ 17 CFR 200.30-3(a)(12) (1989).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 96-6714 Filed 3-17-95; 8:45 am]
BILLING CODE 8010-01-M