[Federal Register Volume 61, Number 61 (Thursday, March 28, 1996)]
[Notices]
[Pages 13911-13912]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7505]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37006; File No. SR-NASD-96-10]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by National Association of
Securities Dealers, Inc. Relating to the OTC Bulletin Board
Service
March 21, 1996.
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 March
13, 1996, the National Association of Securities Dealers, Inc.
(``NASD'' or ``Association'') 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 the NASD. The NASD has designated this proposal as one constituting
a change to a due, fee, or other charge under Sec. 19(b)(3)(A)(ii) of
the Act, which renders the rule effective upon the Commission's receipt
of this filing. 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
The proposed rule change amends Part VIII of Schedule D to the NASD
By-Laws.\1\ The text of the proposed rule change is as follows.
(Additions are italicized; deletions are bracketed.)
\1\ Pursuant to a new rule numbering system for the NASD Manual
anticipated to be effective no later than May 1, 1996, the rule that
is the subject of this proposed rule change will become Rule
7010(m). 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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Part VIII--Schedule of NASD Charges for Services and Equipment
A. System Services
* * * * *
14. OTC Bulletin Board Service
The following charge shall apply to a broker-dealer that displays
quotations or trading interest in the OTC Bulletin Board service:
Position charge--$6.00 [$5.00]/security/month
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the NASD 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. The NASD 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
The OTC Bulletin Board Service (``OTCBB'' or ``Service'') is an
electronic quotation medium operated by the Nasdaq Stock market, Inc.
that allows eligible members to enter, update, and retrieve quote
information and unpriced indications of interest for non-Nasdaq
securities. The purpose of this proposed rule change is to increase the
OTCBB position charge from $5 to $6 per market maker position per
month. The fee increase will be effective as of the beginning of 1996.
This fee increase is intended to recover a portion of the costs of a
number of enhancements to the Service since it was first launched in
1990, as well as to recognize an increase in costs associated with the
operation and regulation of the OTCBB.
Specifically, several enhancements have been in place for over two
years without any increase in fees to offset development,
implementation, and maintenance costs. These include ACT trade
reporting; real time display of high, low, close, previous close, and
volume; OTCBB symbols programmable in the Nasdaq Workstation ticker;
size requirements for priced issues; the admission of certain regional
exchange-listed issues; nightly removal of stale foreign equity quotes;
and expedited admission of delisted Nasdaq, NYSE and Amex issues, as
well as qualifying issues from other quotation mediums.
In addition, the NASD has submitted a filing with the Commission to
permit the quotation of Direct Participation Program securities
(``DPPs'') in the OTCBB, and to require transaction reporting for these
securities. This will allow for a more centralized and transparent
system for the quotation of DPPs, and will provide more efficient price
discovery. Costs associated with
[[Page 13912]]
this initiative that already have been incurred include the creation
and maintenance of a DPP ticker symbol database and directory for
several thousand identifiable DPP issues.
The NASD believes that the proposed rule change is consistent with
the provisions of Section 15A(b)(5) \2\ of the Act. Section 15A(b)(5)
specifies that the rules of a national securities association shall
provide for the equitable allocations of reasonable dues, fees, and
other charges among members, issuers, and other persons using any
facility or system that the association operates or controls. The fee
increase is the first since inception of the Service almost six years
ago, and remains competitive with rates of the primary competitor.
\2\ 15 U.S.C. Sec. 78o-3.
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(B) Self-Regulatory Organization's Statement on Burden on Competition
The NASD 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 immediately pursuant
to Section 19(b)(3)(A)(ii) of the Act and subparagraph (e) of Rule 19b-
4 thereunder in that it constitutes a change to a due, fee, or other
charge.
At any time within sixty (60) days of the filing of a proposed 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. 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. Sec. 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 18, 1996.
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. 96-7505 Filed 3-27-96; 8:45 am]
BILLING CODE 8010-01-M
