[Federal Register Volume 60, Number 121 (Friday, June 23, 1995)]
[Notices]
[Pages 32722-32723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15420]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-35862; File No. SR-NASD-95-18]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change by National Association of Securities Dealers, Inc., Relating to
Corporate Financing Underwriting Terms and Arrangements
June 19, 1995.
On May 3, 1995, the National Association of Securities Dealers,
Inc. (``NASD'' or ``Association'') filed with the Securities and
Exchange Commission (``SEC'' or ``Commission'') a proposed rule change
pursuant to Section 19(b)(1) of the Securities [[Page 32723]] Exchange
Act of 1934 (``Act''),\1\ and Rule 19b-4 thereunder.\2\ The proposed
rule change amends the NASD's Rules of Fair Practice, Article III,
Subsection 44(c)(6)(B)(xi) of the Corporate Financing Rule to raise the
permissible level of non-cash incentives to $100 per person per issuer
annually.
\1\ 15 U.S.C. 78s(b)(1) (1988).
\2\ 17 CFR 240.19b-4.
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Notice of the proposed rule change, together with the substance of
the proposal, was issued by Commission release (Securities Exchange Act
Release No. 35712, May 12, 1995) and by publication in the Federal
Register (60 FR 26753, May 18, 1995). No comment letters were received.
The Commission is approving the proposed rule change.
I. The Terms of Substance of the Proposed Rule Change
Subsection 44(c)(6)(B)(xi) of the Corporate Financing Rule (the
``Rule'') currently prohibits NASD members from receiving non-cash
sales incentives from an issuer or its affiliates valued in excess of
$50 per person per issuer annually. Such non-cash sales incentives are
typically de minimis in nature, such as small souvenir or gift items,
provided by issuers to a member or associated persons of a member. The
sole purpose of this rule is to raise the permissible level of non-cash
sales incentives to $100 per person, annually.
II. Commission Findings
The Commission believes that a dollar amount of $100 is still
relatively low and will neither compromise the intent, nor reduce the
ability, of the rule to prevent fraudulent acts and practices that
might arise in connection with the giving of gifts or payments by
issuers and their affiliates as non-cash compensation to members or
persons associated with members.
Additionally, the amendment will make the value-limitation
provisions of the Rule consistent with similar provisions in Article
III, Sections 10 and 34 of the Rules of Fair Practice, with proposed
amendments to Sections 26 and 29 now pending SEC approval, and with
Rule 350(a) of the New York Stock Exchange (``NYSE''). The amendment to
the Rule would provide regulatory consistency and simplify compliance
for member firms that are also members of the NYSE.
The Commission believes that the proposed rule change is consistent
with the provisions of Section 15A(b)(6) of the Act,\3\ which require
that the rules of the association be designed to prevent fraudulent and
manipulative acts and promote just and equitable principles of trade in
that the proposed rule change allows for an increase in the dollar
limit to a level that is still reasonably de minimis and provides for
regulatory consistency with other rules of the NASD and the NYSE.
\3\ 15 U.S.C. 78o-3.
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It is therefore ordered, pursuant to Section 19(b)(2) of the Act,
that the proposed rule change SR-NASD-95-18 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).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-15420 Filed 6-22-95; 8:45 am]
BILLING CODE 8010-01-M
