[Federal Register Volume 64, Number 92 (Thursday, May 13, 1999)]
[Notices]
[Pages 25945-25946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-12069]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-41371; File No. SR-NASD-98-96; Amendment No. 4]


Self-Regulatory Organizations; Notice of Filing of Amendment No. 
4 to Proposed Rule Change by the National Association of Securities 
Dealers, Inc. Relating to Amendments to Forms U-4 and U-5

May 5, 1999.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on April 28, 1998, the National Association of Securities Dealers, Inc. 
(``NASD'' or ``Association''), through its wholly owned subsidiary NASD 
Regulation, Inc. (``NASD Regulation'' or ``NASDR''), filed with the 
Securities and Exchange Commission (``SEC'' or ``Commission'') 
Amendment No. 4 to the proposed rule change\3\ 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 as further amended by Amendment No. 4 from 
interested persons.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ The Commission previously published notice of the proposed 
rule change on April 22, 1999. See Securities Exchange Act Release 
No. 41326 (April 22, 1999), 64 FR 23366 (April 30, 1999) (File No. 
SR-NASD-98-96).
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I. Self-Regulatory Organization's Statement of the Terms of 
Substance of the Proposed Rule Change

    Amendment No. 4 provides additional detail on how NASDR will 
process the Proposed Forms U-4 and 
U-5.

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

    In its filing with the Commission, NASDR 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. NASDR has prepared summaries, set forth in Sections A, 
B, and C below, of the most significant aspects of such statements.

[[Page 25946]]

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

1. Purpose
    Amendment No. 4 clarifies two aspects of the proposal \4\ and 
processing of the Proposed Forms U-4 and U-5 on the new World Wide Web-
based Central Registration Depository (``Web CRD''). When a firm 
initiates a Form U-4 filing on Web CRD for the first time for an 
individual with disclosure information, a blank Page 3 of the Proposed 
Form U-4 will appear on the screen. Just as with the current paper 
filing system, a firm will be required to fill out the entire Page 3 to 
reflect all currently reportable disclosure information, some or all of 
which may already have been reported to CRD. Thereafter, as a 
convenience, a member will be able to retrieve the most recently filed 
electronic Page 3 of the Form U-4 and edit it for submission, rather 
than filling out the blank Page 3 for each subsequent filing.
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    \4\ See supra note 3.
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    There also will be paper processing available for one part of one 
Disclosure Reporting Page (``DRP'') associated with the Proposed Form 
U-5. The 1996 Form U-5 DRP for internal reviews contains a Part II, 
which allows a terminated registered representative to provide a 
summary of the circumstances relating to an internal review disclosure 
submitted by the individual's former employer on the Form U-5. This 
Part II also appears on the Proposed Form U-5 Internal Review DRP. 
NASDR has informed the Commission staff that it is prepared to accept 
paper submissions of this Part II information by a terminated 
registered representative and that NASDR staff will enter the 
information on to The Web CRD system on behalf of the terminated 
registered representative.
2. Statutory Basis
    NASDR believes that Amendment No. 4 is consistent with the 
provisions of Section 15A(b)(6) of the Act, which requires, among other 
things, that the Association's rules must be designed to prevent 
fraudulent and manipulative acts and practices, to promote just and 
equitable principles of trade, and, in general, to protect investors 
and the public interest. NASDR believes that Amendment No. 4 is 
consistent with the NASD's authority to adopt appropriate qualification 
and registration requirements for persons associated with NASD members 
or applicants for NASD membership. Article V, Section 2 of the NASD By-
Laws authorizes the Board to prescribe the form used by any person who 
wishes to make application for registration with the NASD. NASDR 
believes that Amendment No. 4 will make the filing of information with 
CRD easier and more efficient while continuing to provide complete 
information for use by regulators, SROs, and firms conducting pre-hire 
checks.

B. Self-Regulatory Organization's Statement on Burden on Competition

    NASD Regulation does not believe that the proposed rule change, as 
amended, will result in any burden on competition that is not necessary 
or appropriate in furtherance of the purposes of the Act.

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, including whether the proposed rule 
is consistent with the Act. Persons making written submissions should 
file six copies thereof with the Secretary, Securities and Exchange 
Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. 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. SR-NASD-98-96 and should be 
submitted by May 28, 1999.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority.\5\
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    \5\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-12069 Filed 5-12-99; 8:45 am]
BILLING CODE 8010-01-M