[Federal Register Volume 63, Number 231 (Wednesday, December 2, 1998)]
[Notices]
[Pages 66618-66619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32039]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-40706; File No. SR-NASD-98-87]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Association of
Securities Dealers, Inc. Relating to the Filing Fees Under the
Corporate Financing Rule
November 24, 1998.
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 November 23, 1998, the National Association of Securities Dealers,
Inc. (``NASD''), through its wholly owned subsidiary, NASD Regulation,
Inc. (``NASD Regulation'') 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 NASD Regulation. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of
Substance of the Proposed Rule Change
NASD Regulation is proposing to amend Section 6 of Schedule A to
the NASD By-laws and NASD Conduct Rule 2710, to delete the provisions
mandating that Corporate Financing filing fees be paid in the form of a
check or money order. Below is the text of the proposed rule change.
Proposed new language is in italics; proposed deletions are in
brackets.
Schedule A to the NASD By-Laws
Assessments and fees pursuant to the provisions of Article VI of
the By-Laws of the Corporation, shall be determined on the following
basis.
Section 1-Section 5 No Change
Section 6--Fees for Filing Documents Pursuant to the Corporate
Financing Rule
(a) No change.
(b) No change.
[(c) Filing fees shall be paid only in the form of check or
money order payable to the National Association of Securities
Dealers, Inc.]
[(d)](c) The provisions of Rule 457 adopted under the Securities
Act of 1933, as amended, shall govern the computation of filing fees
for all offerings filed pursuant to this Section, including
intrastate offerings, to the extent the terms of Rule 457 are not
inconsistent with this Section.
Section 7-Section 15 No change
* * * * *
2710. Corporate Financing Rule--Underwriting Terms and Arrangements
(a) Definitions No change
(b) Filing Requirements.
(1)-(9) No change.
(1) Filing Fees.
(A) No change.
(B) No change.
[(C) Filing fees shall be paid only in the form of a check or
money order payable to the National Association of Securities
Dealers, Inc.]
[(D)](C) The provisions of SEC Rule 457 adopted under the
Securities Act of 1933, as amended, shall govern the computation of
filing fees for all offerings filed pursuant to this Rule, including
intrastate offerings, to the extent the terms of Rule 457 are not
inconsistent with subparagraph (a)[,] or (B) [or (C)] above.
(11)-(13) renumbered (10)-(12). (c) No change.
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
NASD Conduct Rule 2710 (the ``Corporate Financing Rule'') requires
that members file most proposed public offerings with the Corporate
Financing Department (``Department'') of NASD Regulation. The Corporate
Financing Department reviews these filings in order to determine
whether the underwriting terms and arranagements are fair and
reasonable pursuant to standards set forth in Rules 2710, 2720, and
2810 prior to the commencement of the offering. Section 6 of Schedule A
to the NASD By-Laws (``Schedule A'') and Paragraph (b)(10) of Conduct
Rule 2710 include identical provisions that impose a fee on each
filing, in the amount of $500 plus .01% of the value of securities,
with a maximum filing fee
[[Page 66619]]
limit of $30,500 (the ``Corporate Financing filing fee'').
Section 6(c) of Schedule A and Paragraph (b)(10)(C) of Conduct Rule
2710 currently require that all Corporate Financing filing fees be paid
by check or money order. Such a specific provision was originally
adopted in order to prevent the payment of filing fees in cash. Since
that time, new methodologies have arisen that facilitate the transfer
of money. In order to ensure that NASD Regulation has the necessary
flexibility to implement newer forms of payment, NASD Regulation
proposes to eliminate Section 6(c) of Schedule A and Paragraph
(b)(10)(C) of Conduct Rule 2710. Further a conforming change is made to
Paragraph (b)(10)(D) of Conduct Rule 2710 to delete the reference to
Paragraph (C) of the same section.
Based on this proposal, members may continue to submit Corporate
Financing filing fees in the form of a check or money order to the
Corporate Financing Department at the same time that the related
documents are filed. Cash payment will still not be accepted in
accordance with the standard business practice of the Association. The
Association will, however, also implement payment of the Corporate
Financing filing fee by wire transfer, and intends to inform filers and
members generally of this option. In the case where such a wire
transfer is used, the payment of the fee on a timely basis will be
considered to ``accompany'' the filing of the original offering
documents or amended offering documents to which it relates, as
required by Sections 6(a) and (b) of Schedule A and by
Paragraphs(b)(10)(A) and (B) of Conduct Rule 2710.
2. Purpose
NASD Regulation believes that the proposed rule change is
consistent with the provisions of Section 15A(b)(5) \3\ of the Act,
which requires that the rules of the Association provide for the
equitable allocation of reasonable dues, fee, and other charges among
members. The Association believes that the proposed rule change
provides for the equitable allocation of the fees paid by members in
connection with the submission of proposed public offerings with the
Corporate Financing Department for review.
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\3\ 15 U.S.C. 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
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(iii) \4\ of the Act and subparagraph (e) of Rule 19b-4 \5\
thereunder in that it is concerned solely with the administration of a
self-regulatory organization.
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\4\ 15 U.S.C. 78s(b)(3)(A)(iii).
\5\ 17 CFR 240.19b-4(e)(1).
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At any time within 60 days of the filing of a 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 including whether the proposal is
consistent with the Act. 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 No. SR-NASD-98-87 and should be
submitted by December 23, 1998.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\6\
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\6\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-32039 Filed 12-1-98; 8:45 am]
BILLING CODE 8010-01-M
