[Federal Register Volume 61, Number 62 (Friday, March 29, 1996)]
[Notices]
[Pages 14182-14183]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-7642]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-37014; File No. SR-NASD-96-05]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change by National Association of Securities Dealers, Inc. Relating to
the Mutual Fund Quotation Service
March 22, 1996.
On February 5, 1996, the National Association of Securities
Dealers, Inc. (``SEC'' or ``Commission'') the proposed rule change
pursuant to Section 19(b)(1)
[[Page 14183]]
of the Securities Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4
thereunder.\2\ The proposed rule change revises the fee structure for
the Mutual Fund Quotation Service (``MFQS'' or ``Service'') and updates
the name of the Service in the NASD Rules. Notice of the propose the
rule change, together with the substance of the proposal, was issued by
Commission release (Securities Exchange Act Release No. 36840, February
13, 1996) and by publication in the Federal Register (61 FR 6674,
February 21, 1996). No comment letters were received. The Commission is
approving the proposed rule change.
\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ 17 CFR 240.19b-4.
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I. Background
The purpose of the proposed rule change is to revise the fee
structure for the Service to account for significant enhancements and
to reflect more accurately the value of the Service in today's market.
The Service facilitates the public dissemination of daily price
information for mutual funds and money market funds through the
broadcast media and the newspapers. After the market close each day,
mutual fund companies or their agents calculate the net asset value
(``NAV''), and in some cases the dividend, capital gain, and other
pertinent information for each fund. This information is submitted to
the NASD by computer, which in turn disseminates it out to the media in
a static batch transmission at approximately 5:40 p.m. Depending on the
size and number of shareholders, funds may quality for inclusion in
either the News Media List or the Supplemental List.
II. The terms of Substance of the Proposed Rule Change
The proposed rule change amends Part VIII and Part XIV of Schedule
D to the NASD B-Laws.\3\ Under the proposed rule change, new mutual
funds will be assessed a one-time application processing fee of $250
per fund. In addition, the fee to include a fund in the News Media List
will increase from $150 to $275 per year. The fee to include a fund in
the Supplemental List will increase from $100 to $200 per year.
\3\ Pursuant to a new rule numbering system for the NASD Manual
anticipated to be effective no later than May 1, 1996, the rules
that are the subject of this proposed rule change will become Rule
7090 (regarding fee structure), and Rule 6800 (regarding description
of the Service). 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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III. Discussion
The Commission believes that the proposed rule change is consistent
with the provisions of Section 15A(b)(5) of the Act, which requires
that the rules of a national securities association provide for the
equitable allocation of reasonable dues, fees, and other charges among
members and issues and other persons using any facility or system which
the association operates or controls. The current fees have remained
unchanged over a ten year period since inception of the Service,
although the number of funds and shareholder accounts have increased
more than three-fold. In addition, the one-time application fee for new
funds is intended to defray the costs incurred in processing
applications.
The fee increases are necessary to provide benefits to mutual
funds, their agents, and the media. Several enhancements to the
Service, including the establishment of a system of rolling
dissemination of prices, will improve the distribution to the media of
price information in a timely fashion. Rolling dissemination of prices
will allow mutual funds and their agents to enter real-time updates
throughout the day which will decrease rushed end-of-day transmissions
of price information. The media will have more time to prepare its
daily fund tables for inclusion in newspapers because the media will be
receiving fund NAVs when they are available. Furthermore, the public
that has increased its reliance on daily price information will benefit
from real-time updates of price information which reduce the risk that
the media will not receive any price information for publication. If a
transmission problem occurs between 4:00 p.m. and 5:40 p.m., the media
already will have received some fund information for publication,
instead of relying on a single batch transmission at 5:40 p.m., as in
the case today.
It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change SR-NASD-96-05 be, and hereby is,
approved.
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. 96-7642 Filed 3-28-96; 8:45 am]
BILLING CODE 8010-01-M
