[Federal Register: June 15, 2006 (Volume 71, Number 115)]
[Notices]
[Page 34658-34660]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jn06-71]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53955; File No. SR-NASD-2006-065]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change and Amendment No. 1 Thereto Relating to the Establishment
of an Annual Branch Office System Processing Fee and the Waiver of the
Annual Branch Office System Processing Fee and the Annual Branch Office
Registration Fee for One Branch Officer per Member per Year
June 7, 2006.
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 May 23, 2006, the National Association of Securities Dealers, Inc.
(``NASD'') 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 NASD. On May 31,
2006, NASD filed Amendment No. 1 to the proposed rule change.\3\ NASD
has designated this proposal as establishing or changing a due, fee, or
other charge imposed by NASD pursuant to Section 19(b)(3)(A)(ii) of the
[[Page 34659]]
Act,\4\ and Rule 19b-4(f)(2) thereunder,\5\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change, as
amended, from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ In Amendment No. 1, NASD made technical changes to the rule
filing, including correcting certain underlining in the rule text.
\4\ 15 U.S.C. 78s(b)(3)(A)(ii).
\5\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD proposes to amend Section 4 of Schedule A to the NASD By-Laws
to: (1) Establish an annual branch office system processing fee and (2)
waive the annual branch office system processing fee for one branch
office per member per year and, as specified in the proposed rule
change, as amended, the annual branch office registration fee for one
branch office per member per year. NASD intends to implement the
proposed rule change, as amended, on July 3, 2006. The text of the
proposed rule change, as amended, is available on NASD's Web site
(http://www.nasd.com), at NASD's Office of the Secretary, and at the
Commission's Public Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, NASD included statement
concerning the purpose of and basis for the proposed rule change, as
amended, and discussed any comments it received on the proposed rule
change, as amended. The text of these statements may be examined at the
places specified in Item IV below. 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 September 30, 2005, the SEC approved NASD's proposed Uniform
Branch Office Registration Form (``Form BR''), which became effective
on October 31, 2005. The Form BR replaces Schedule E of the Form BD,
the New York Stock Exchange LLC (``NYSE'') Branch Office Application
Form, and certain state branch office forms. The Form BR enables firms
to register branch offices electronically with NASD, NYSE, and states
that require branch registration or reporting via a single filing
through the Central Registration Depository (``CRD[supreg]'' or ``CRD
system''). Branch office registration through the CRD system creates
efficiencies for firms by, among other things, making it easier for
firms to register or report branch offices and to manage their ongoing
registration and/or reporting responsibilities with regard to those
branch offices. In addition to being able to submit a single filing to
fulfill the branch office registration requirements of NASD, NYSE, and
states, firms benefit from the centralized fee collection, online work
queues, electronic notifications and other features available through
the CRD system. Firms are also able to link their registered persons to
the physical location from which they work via the Form BR, which not
only aids regulators' examination efforts, but helps firms in meeting
certain recordkeeping requirements.
The purpose of the branch office system processing fee is to
recover the cost to NASD of developing and implementing the Form BR, as
well as ongoing branch office system maintenance and enhancements. NASD
staff will monitor this fee to determine whether adjustments are
appropriate and will file rule changes to modify this fee, as
appropriate. The fee is $20 upon the registration of a branch office
and $20 annually thereafter per registered branch.
NASD proposes to begin assessing the branch office system
processing fee during the third quarter of 2006 for all branch offices
in existence as of July 3, 2006. NASD proposes to bill firms for all
branch offices in existence as of July 3, 2006 via invoices, rather
than through the CRD system. For any branch office that is registered
on or after July 3, 2006, NASD proposes to assess and collect the
branch office system processing fee through the CRD system at such time
as the firm registers that new branch office.\6\ Starting in December
2006, all firms will assessed $20 annually for each existing branch
office as part of the CRD renewal program.\7\
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\6\ The CRD system will be available on July 3, 2006, for
purposes of registering branch offices, but will not be available on
July 4, 2006. Firms will again be able to register branch offices
through the CRD system on July 5, 2006.
\7\ This proposed rule change, as amended, addresses the
assessment and collection of branch office system processing fees
and the waiver of both the annual branch office registration fee and
the annual branch office system processing fee for one branch office
per member per year only with respect to NASD member firms. The
manner of assessment and collection of branch office system
processing fees from firms that are solely members of other self-
regulatory organizations (``SROs'') that require their members to
register branch offices via the Form BR (currently, only NYSE) will
be addressed by such SROs.
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In addition, NASD proposes to waive the annual branch office
registration fee (for those NASD members who have been assessed such
fee pursuant to Section 4(a)(1)(i) of Schedule A to the NASD By-Laws)
and the annual branch office system processing fee (for all NASD
members) for one branch office per NASD member per year. The fee waiver
is prospective only, and will take effect for the year 2006 on July 3,
2006, the implementation date for this proposed rule change, as
amended.\8\
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\8\ Firms that have already paid their annual $75.00 branch
office fees for the year 2006 will receive a $75.00 credit for one
branch office.
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NASD has filed the proposed rule change, as amended, for immediate
effectiveness. The implementation date shall be July 3, 2006.
2. Statutory Basis
NASD believes that the proposed rule change, as amended, is
consistent with the provisions of Section 15A(b)(5) of the Act,\9\
which requires, among other things, that NASD 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
NASD operates or controls. NASD believes that the proposed rule change,
as amended, is designed to accomplish these ends by equitably assessing
the costs of establishing and maintaining the CRD branch office
registration system.
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\9\ 15 U.S.C. 78o-3(b)(5).
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B. Self-Regulatory Organization's Statement on Burden on Competition
NASD does not believe that the proposed rule change, as amended,
will result in any burden on competition that is not necessary or
appropriate in furtherance of the purposes of the Act.
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 on the
proposed rule change, as amended.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The proposed rule change, as amended, has become effective pursuant
to Section 19(b)(3)(A)(ii) \10\ of the Act and paragraph (f)(2) of Rule
19b-4 thereunder,\11\ in that it establishes or changes a due, fee, or
other charge applicable to NASD members. NASD
[[Page 34660]]
intends to implement the proposed rule change, as amended, on July 3,
2006.
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19b-4(f)(2).
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At any time within 60 days of the filing of the proposed rule
change, as amended, 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.\12\
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\12\ The effective date of the original proposed rule change is
May 23, 2006, and the effective date of Amendment No. 1 is May 31,
2006. For purposes of calculating the 60-day period within which the
Commission may summarily abrogate the proposed rule change, as
amended, under Section 19(b)(3)(C) of the Act, the Commission
considers the period to commence on May 31, 2006, the date on which
NASD submitted Amendment No. 1. See 15 U.S.C. 78s(b)(3)(C).
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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 proposed rule
change, as amended, is consistent with the Act. Comments may be
submitted by any of the following methods:
Electronic Comments
Use the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml.
); or Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2006-065 on the subject line.
Paper Comments
Send paper comments in triplicate to Nancy M. Morris,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-1090.
All submissions should refer to File Number SR-NASD-2006-065. This file
number should be included on the subject line if e-mail is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml
). 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 also will be available for inspection and copying at the
principal office of NASD. All comments received will be posted without
change; the Commission does not edit personal identifying information
from submissions. You should submit only information that you wish to
make available publicly. All submissions should refer to File Number
SR-NASD-2006-065 and should be submitted on or before July 6, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\13\
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\13\ 17 CFR 200.30-3(a)(12).
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J. Lynn Taylor,
Assistant Secretary.
[FR Doc. 06-5419 Filed 6-14-06; 8:45 am]
BILLING CODE 8010-01-M