[Federal Register Volume 71, Number 90 (Wednesday, May 10, 2006)]
[Notices]
[Pages 27299-27300]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-7100]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53751]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Declaration of Effectiveness of the Fingerprint Plan of
the National Association of Securities Dealers, Inc.
May 2, 2006.
On May 1, 2006, the National Association of Securities Dealers,
Inc. (``NASD'') filed with the Securities and Exchange Commission
(``Commission'' or ``SEC'') an amended fingerprinting plan (``Amended
Plan'') pursuant to Rule 17f-2(c) \1\ under the Securities Exchange Act
of 1934 (``Act'').\2\ The Amended Plan \3\ supersedes and replaces the
NASD's current fingerprinting plan.\4\
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\1\ 17 CFR 240.17f-2(c).
\2\ 15 U.S.C. 78a et seq.
\3\ Attached hereto as Exhibit A.
\4\ The Commission declared the current fingerprint plan of the
NASD effective in 1988.
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The NASD believes that the Amended Plan will be an improvement over
the current NASD fingerprinting plan. It permits the NASD to record in
the Central Registration Depository (``CRD'') the status of
fingerprints submitted to the Attorney General. Through the CRD system,
NASD makes available to a member or other securities industry
participant that has submitted fingerprints the status and results of
such fingerprints after submission to the Attorney General. In
addition, the NASD has made other minor clarifying and typographical
revisions.
Under the NASD's current fingerprinting plan, members or other
securities industry participants submit fingerprints and identifying
information, on paper or electronically, to the NASD, which then
forwards the cards to the Federal Bureau of Investigation (``FBI'')
(the fingerprint processing arm of the Office of the Attorney General
of the United States). The FBI identifies submitted fingerprints,
retrieves relevant criminal history information, and returns
fingerprint reports (including the original paper fingerprint cards, if
any) to the NASD. Under the terms of the Amended Plan, the member or
other securities industry participant will be able to view the status
and results of fingerprints, including any relevant criminal history
information, through the CRD system.
The Commission has reviewed the procedures detailed in the Amended
Plan and believes that the Amended Plan is consistent with the public
interest and the protection of investors. Enabling members or other
securities industry participants to view the status and results of
fingerprints, including relevant criminal history information, through
the CRD system should improve the efficiency of members or other
securities industry participants in identifying persons who may be
subject to statutory disqualification more rapidly. Thus, the
Commission declares the Amended Plan to be effective.
The Commission notes that securities industry fingerprinting
procedures are in a state of flux due to rapidly advancing technology.
In the event that an industry-wide standard is adopted or becomes
prevalent and in the event that this Amended Plan substantially differs
therefrom, the Commission would expect the NASD to revise its
fingerprinting plan to incorporate the industry-wide standard.
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)(17)(iii).
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Nancy M. Morris,
Secretary.
Exhibit A--National Association of Securities Dealers, Incorporated;
Fingerprint Plan
National Association of Securities Dealers, Inc. (``NASD'') submits
this Fingerprint Plan (``Plan'') pursuant to Rule 17f-2(c) under the
Securities Exchange Act of 1934 (``Exchange Act''). This Plan
supersedes and replaces the NASD's Fingerprint Plan approved by the
Securities and Exchange Commission (``Commission'') on June 22, 1976,
and as amended thereafter.
The purpose of this Plan is to facilitate securities industry
participants' compliance with Section 17(f)(2) of the Exchange Act and
Rule 17f-2 thereunder, by providing a facility for securities industry
participants to
[[Page 27300]]
have the fingerprints of their partners, directors, officers, and
employees processed by the Attorney General of the United States or his
designee (hereinafter ``Attorney General'') as required by Section
17(f)(2) and Rule 17f-2, thereunder. NASD, pursuant to a Plan filed
with and declared effective by the Commission, processes fingerprint
records of securities industry participants as described herein
consistent with those provisions.
NASD accepts fingerprints and identifying information from member
firms and other securities industry participants required to be
fingerprinted pursuant to Rule 17f-2. Securities industry participants
may submit fingerprints and identifying information on paper or
electronically, provided such submissions are consistent with protocols
and requirements established by the Attorney General.
NASD accepts a single set of fingerprints and identifying
information for an associated person in lieu of separate fingerprint
submissions by affiliated NASD member firms with which the individual
is associated in satisfaction of the Section 17(f)(2) fingerprinting
requirement, provided that the NASD affiliate member firms are under
common ownership or control as reported on Form BD, and that affiliate
information is provided with the initial application for registration.
NASD transmits fingerprints and identifying information, on paper
or electronically, to the Attorney General for identification and
processing, consistent with protocols and requirements established by
the Attorney General.
NASD receives processed results from the Attorney General (on paper
or electronically) and transmits those results via paper or electronic
means to authorized recipients (i.e., to a member or other securities
industry participant that submitted the fingerprints and to regulators
for licensing, registration and other regulatory purposes), consistent
with protocols and requirements established by the Attorney General. In
cases where the Attorney General's search on the fingerprints submitted
fails to disclose prior arrest data, NASD transmits that result to the
securities industry participant that submitted the fingerprints. In
cases where the Attorney General's search yields Criminal History
Record Information (CHRI), NASD transmits that information to the
securities industry participant that submitted the fingerprints. With
respect to members, NASD also reviews any CHRI returned by the Attorney
General to identify persons who may be subject to statutory
disqualification under the Exchange Act and to take action, as
appropriate, with respect to such persons.
NASD advises its members and member applicants of the availability
of fingerprint services and any fees charged by NASD in connection with
those services and the processing of fingerprints pursuant to this
Plan. NASD will file any such NASD member fees with the Commission
pursuant to Section 19(b) of the Exchange Act.
NASD maintains copies of fingerprint processing results received
from the Attorney General with respect to fingerprints submitted by
NASD pursuant to this Plan, in accordance with NASD's Record Retention
Plan filed with the Commission. Any maintenance of fingerprint records
by NASD shall be for NASD's own administrative purposes, and NASD is
not undertaking to maintain fingerprint records on behalf of NASD
members pursuant to Rule 17f-2(d)(2). NASD records in the Central
Registration Depository (CRD[supreg]) the status of fingerprints
submitted to the Attorney General. Through the CRD system, NASD makes
available to a member that has submitted fingerprints the status and
results of such fingerprints after submission to the Attorney General.
NASD shall not be liable for losses or damages of any kind in
connection with its fingerprinting services, as a result of its failure
to follow, or properly to follow, the procedures described above, or as
a result of lost or delayed fingerprint cards, electronic fingerprint
records, or fingerprint reports, or as a result of any action by NASD
or NASD's failure to take action in connection with this Plan.
[FR Doc. E6-7100 Filed 5-9-06; 8:45 am]
BILLING CODE 8010-01-P