[Federal Register Volume 59, Number 75 (Tuesday, April 19, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-9316]
[[Page Unknown]]
[Federal Register: April 19, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-33902; File No. SR-NASD-94-21]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by National Association of
Securities Dealers, Inc. Relating to Fees on Members
April 13, 1994.
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 April 7,
1994, 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 fee 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 NASD is proposing a rule change to amend Schedule A to the By-
Laws\1\ to increase the charges, as set forth in section 13 of Schedule
A,\2\ for the review of certain advertisements and sales literature.
Below is the text of the proposed rule change. Proposed new language is
in italics; proposed deletions are in brackets.
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\1\NASD Manual, Schedules to the By-Laws, Schedule A (CCH) 1751
et seq.
\2\NASD Manual, Schedules to the By-Laws, Schedule A, Sec. 13
(CCH) 1764.
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Schedule A to the By-Laws
* * * * *
Section 13. Service Charge for Advertisement, Sales Literature, and
Other Such Material Filed or Submitted
There shall be a service charge for each and every item of
advertisement, sales literature, and other material, whether in
printed, video or other form, filed with or submitted to the
Association, except for items that are filed or submitted in response
to a written request from the Association's Advertising Regulation
Department issued pursuant to the spot check procedures set forth in
the Association's Rules of Fair Practice and Government Securities
Rules, as follows: (1) For printed material reviewed, $50.00 [$25.00]
plus $10.00 [$5.00] for each page reviewed in excess of 10 [5] pages;
and (2) for video or audio media, $50.00 [$25.00] plus $10.00 [$5.00]
per minute for each minute of tape reviewed in excess of 10 [5]
minutes.
[In addition, w]Where a member requests expedited review of
material submitted to the Advertising Regulation Department there shall
be a[n additional] service charge of $500.00 [$200] per item plus $25
for each page reviewed in excess of 10 pages. Expedited review shall be
completed within three business days, not including the date the item
is received by the Advertising Regulation Department, unless a shorter
or longer period is agreed to by the Advertising Regulation Department.
The Advertising Regulation Department may, in its sole discretion,
refuse requests for expedited review.
* * * * *
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 NASD's Advertising Regulation Department began offering an
expedited review process in February, 1991 for those members who
desired review and comment of advertising and sales literature that was
faster than the normal review and comment process, which is ten
business days. The expedited process is completed within three business
days. Over the past three years, use of the expedited process has
increased far beyond the NASD's expectation. The expedited filing
process has become standard operating procedure for many of the
program's most frequent users and many items filed are frequently more
difficult to review because they contain new concepts and approaches
requiring greater time for research and analysis. The increase in the
number of expedited filings has led to a significant increase in the
amount of administrative processing and has made it more difficult to
provide service within the ten-day turnaround time for normal filings.
The NASD is proposing an amendment to Section 13 of Schedule A to
the NASD By-Laws which establishes a fee structure that will give
members the ability to choose the level of service that best fits their
needs, taking into consideration the costs related to that level. Each
of the specific fees would be increased, including the service charge
for expedited service. However, the service charge for expedited
service would no longer be imposed in addition to the base service
charge and the number of pages or minutes of video that triggers an
additional fee would be increased, i.e., from 5 to 10 pages and from 5
to 10 minutes. The text of the amendment identifies each of the changes
to the fees. The NASD is requesting that the amendment be implemented
on May 1, 1994.
The NASD believes that the proposed rule change is consistent with
the provisions of Section 15A(b)(5) of the Act,\3\ which require that
the rules of the Association provide for the equitable allocation of
dues, fees and other charges among members in that the proposed rule
equitably adjusts the fees assessed for the review of advertising and
sales literature to accurately reflect the time spent and level of
analysis performed per item submitted for review.
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\3\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 upon filing pursuant
to section 19(b)(3)(A)(ii) of the Act and subparagraph (e) of rule 19b-
4 thereunder in that it constitutes a due, fee or other charge. The
rule will be implemented on May 1, 1994.
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. Persons making written submissions
should file six copies thereof with the Secretary, Securities and
Exchange Commission, 450 Fifth Street, NW., Washington, DC 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 file number SR-NASD-94-21 and
should be submitted by May 10, 1994.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-9316 Filed 4-18-94; 8:45 am]
BILLING CODE 8010-01-M
