[Federal Register: April 24, 2003 (Volume 68, Number 79)]
[Notices]
[Page 20198-20199]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24ap03-123]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-47685; File No. SR-NASD-2003-73]
Self-Regulatory Organizations; Notice of Filing and Immediate
Effectiveness of Proposed Rule Change by the National Association of
Securities Dealers, Inc. To Extend the Pilot Period for the Regulatory
Fee and the Trading Activity Fee
April 16, 2003.
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 April 14, 2003, the National Association of Securities Dealers, Inc.
(``NASD'') filed with the Securities and Exchange Commission
(``Commission'') the proposed rule change as described in items I and
II below, which Items have been prepared by the NASD. The NASD filed
the proposal pursuant to section 19(b)(3)(A) of the Act,\3\ and rule
19b-4(f)(6) thereunder,\4\ which renders the proposal effective upon
filing with the Commission.\5\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A).
\4\ 17 CFR 240.19b-4(f)(6).
\5\ The Commission waived the five-day pre-filing notice
requirement. See Rule 19b-4(f)(6)(iii). 17 CFR 240.19b-4(f)(6)(iii).
The NASD also asked the Commission to waive the 30-day operative
delay.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The NASD proposes to extend the pilot period for the Trading
Activity Fee (``TAF'') through June 1, 2003. The TAF (as originally
proposed in SR-NASD-2002-98) is in effect, and is set to expire on
April 15, 2003.\6\ The NASD is requesting the Commission approve SR-
NASD-2002-148, granting permanent approval of the TAF, before the
expiration of the TAF pilot on June 1, 2003.\7\ If the Commission does
not approve SR-NASD-2002-148 before the expiration of the TAF pilot on
June 1, 2003, the trading fee component of the member regulatory
pricing structure will revert to Section 8 of Schedule A to the NASD
By-Laws, as amended.
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\6\ See Securities Exchange Act Release No. 46416 (August 23,
2002), 67 FR 55901 (August 30, 2002) (SR-NASD-2002-98). See also
Securities Exchange Act Release Nos. 47112 (December 31, 2002), 68
FR 824 (January 7, 2003) (SR-NASD-2002-182), 47436 (March 4, 2003),
68 FR 11422 (March 10, 2003) (SR-NASD-2003-26), and 47623 (April 3,
2003), 68 FR 17712 (April 10, 2003) (SR-NASD-2003-65).
\7\ See Securities Exchange Act Release No. 46817 (November 12,
2002), 67 FR 69785 (November 19, 2002) (SR-NASD-2002-148).
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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 its proposal and discussed any
comments it received regarding the proposal. 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
1. Purpose
On July 24, 2002, the NASD filed SR-NASD-2002-98, which proposed a
new member regulatory pricing structure, including the TAF, to replace
the existing trading fee contained in Section 8 of Schedule A to the
NASD By-Laws.\8\ SR-NASD-2002-98 is currently in effect. Assessments
under the TAF were effective as of October 1, 2002, payable January 15,
2003.\9\ On October 18, 2002, the NASD established a sunset provision
whereby the TAF established by SR-NASD-2002-98 would cease to exist
after December 31, 2002.\10\ Upon expiration of SR-NASD-2002-98, the
member regulatory pricing structure was to revert to Section 8 of
Schedule A to the NASD By-Laws, as amended.
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\8\ Securities Exchange Act Release No. 46416 (August 23, 2002),
67 FR 55901 (August 30, 2002) (SR-NASD-2002-98). See also Securities
Exchange Act Release No. 46417 (August 23, 2002), 67 FR 55893
(August 30, 2002) (SR-NASD-2002-99). The NASD also published three
Notices to Members describing the proposed changes and addressing
interpretive questions posed by NASD members. See Notices to Members
02-41 (July 2002), 02-63 (September 2002), and 02-75 (November
2002).
\9\ Member firms were required to pay the TAF in accordance with
the pilot program (for the first quarter starting October 1, 2002)
by no later than January 15, 2003, and thereafter, on a monthly
basis.
\10\ At the same time, the NASD filed a new proposed rule change
(SR-NASD-2002-148), substantially similar to SR-NASD-2002-98, but
filed under Section 19(b)(1) of the Act, to allow for additional
comment.
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On December 24, 2002, the NASD extended the TAF pilot through March
1, 2003. On February 28, 2002, the NASD again extended the TAF pilot
through April 1, 2003. On March 31, 2003, the NASD again extended the
TAF pilot program through April 15, 2003. With the instant proposed
rule change, the NASD is extending the TAF pilot through June 1, 2003,
to allow the Commission additional time to review issues presented by
the proposal to make the TAF permanent (SR-NASD-2002-148). The NASD
requests that the Commission approve SR-NASD-2002-148 before the
expiration of the TAF pilot on June 1, 2003.
2. Statutory Basis
The NASD believes that the proposed rule change is consistent with
the Act, including Section 15A(b)(5),\11\ which requires, among other
things, that the NASD's rules provide for the equitable allocation of
reasonable dues, fees, and other charges among members and issuers and
other persons using any facility or system that the NASD operates or
controls.
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\11\ 15 U.S.C. 7o-3(b)(5).
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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 on this proposed rule change were neither
solicited nor received. Written comments, however, have been solicited
by publication in the Federal Register of SR-NASD-2002-98, SR-NASD-
2002-147, SR-NASD-2002-148, SR-NASD-2002-182, and SR-NASD-2003-26.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not:
[[Page 20199]]
(i) Significantly affect the protection of investors or the public
interest;
(ii) Impose any significant burden on competition; and
(iii) Become operative for 30 days from the date on which it was
filed, or such shorter time as the Commission may designate, it has
become effective pursuant to section 19(b)(3)(A) of the Act \12\ and
rule 19b-4(f)(6) thereunder.\13\ At any time within 60 days of the
filing of the proposed rule change, the Commission may summarily
abrogate such 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.
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\12\ 15 U.S.C. 78s(b)(3)(A).
\13\ 17 CFR 240.19b-4(f)(6).
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The NASD has requested that the Commission waive the 30-day
operative delay. The Commission believes waiving the 30-day operative
delay is consistent with the protection of investors and the public
interest. Acceleration of the operative date will allow the TAF pilot
to operate without interruption through June 1, 2003. For these
reasons, the Commission designates the proposal to be effective and
operative upon filing with the Commission.\14\
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\14\ For purposes only of accelerating the operative date of
this proposal, the Commission has considered the proposed rule's
impact on efficiency, competition, and capital formation. 15 U.S.C.
78c(f).
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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, NW., Washington, DC 20549-0609. 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-2003-73 and should be
submitted by May 15, 2003.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 03-10102 Filed 4-23-03; 8:45 am]
BILLING CODE 8010-01-P