[Federal Register Volume 59, Number 175 (Monday, September 12, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22467]
[[Page Unknown]]
[Federal Register: September 12, 1994]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-34639; File No. SR-NASD-94-34]
Self-Regulatory Organizations; Order Approving Proposed Rule
Change by the National Association of Securities Dealers, Inc.,
Relating to Fees for the Late Payment of Service Charges
September 2, 1994.
I. Introduction
On May 27, 1994, the National Association of Securities Dealers,
Inc. (``NASD'' or ``Association'') filed with the Securities and
Exchange Commission (``Commission'' or ``SEC'') pursuant to Section
19(b)(1) of the Securities Exchange Act of 1934 (``Act'')\1\ and Rule
19b-4 thereunder,\2\ a proposed rule change to adopt a uniform and
consistent methodology for assessing fees for late payment of Nasdaq
Stock Market service charges. On July 29, 1994, the NASD filed with the
Commission Amendment No. 1 to the proposed rule change.\3\
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\1\15 U.S.C. 78s(b)(1) (1988).
\2\17 CFR 240.19b-4 (1991).
\3\Amendment No. 1 to the proposal corrects a mathematical error
in an example provided in the language of the proposed rule change,
and explains that the new late fee established by the proposal will
be assessed to accounts that are in arrears prior to the
implementation of the new late fee charge. Letter from Joan Conley,
Corporate Secretary, NASD, to Elizabeth MacGregor, Branch Chief,
Commission, dated July 28, 1994.
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The proposed rule change, as amended, was published for comment in
Securities Exchange Act Release No. 34479 (August 2, 1994), 59 FR 40632
(August 9, 1994). No comments were received on the proposal.
II. Description of the Proposal
The NASD proposal amends Part IX of Schedule D to the NASD By-Laws
to establish a uniform and consistent methodology for assessing fees
for the late payment of The Nasdaq Stock Market, Inc. (``NSM'')
charges. The late fee will be applied to all charges imposed by NSM
that are past due 45 days or more. The late fee will be computed by
taking the summation of one and one-half percent (1\1/2\%) of the
amount past due for the first month, plus one and one-half percent
(1\1/2\%) of the amount past due for any month thereafter, compounded
by late fees assessed for previous months. For example, if an account
is past due $1,000 for 45 days, the late fee would be $30.22. This
charge reflects a charge of $15 for the first month past due ($1,000
x 1\1/2\%) and $15.22 for the second month past due ($1,015 x 1\1/
2\%).
The new late fee structure will replace the existing structure
(found in section H of Part IX of Schedule D to the By-Laws) which
provides that charges for Nasdaq Level 1 and Nasdaq/NMS Last Sale
services which are past due 45 days will be assessed a fee equal to
1\1/2\% per months of the unpaid balance. For all other Nasdaq charges,
namely, charges for the Nasdaq Level \2/3\ service, Over-the-Counter
Bulletin Board (``OTCBB''), Mutual Fund Quotation Program, and Nasdaq
Workstation service (collectively referred to hereinafter as ``Nasdaq
charges''), the late payment fee presently is equal to 10% of the
amount past due for 60 days or more. By eliminating the current
practice of using these two different methods to assess late fees for
various NSM charges, the NASD believes its operational efficiency will
be enhanced and public confusion concerning the NASD's late fee policy
likely will be diminished.
The proposal also will amend Section H of Part IX of Schedule D to
the By-Laws to provide that the section governs fees for the late
payment of NSM charges instead of ``NASDAQ charges.'' This amendment
reflects the merger, effective June 30, 1993, of two of the NASD's
corporate subsidiaries, Nasdaq, Inc. and NASD Market Services, Inc.
(``MSI'') into one consolidated subsidiary called The Nasdaq Stock
Market, Inc. In addition, this amendment serves to subject charges for
services provided by MSI (the NSM after the merger) to late payment
fees (e.g., SOES, SelectNet, and ACT charges). Currently, other than
for Nasdaq/NMS Last Sale service charges, there is no fee for the alter
payment of service charges that previously were assessed by MSI but now
are assessed by the NSM after the merger.
III. Commission's Findings
The Commission believes that the proposed rule change is consistent
with Section 15A(b)(5) of the Act. Section 15A(b)(5) requires that the
rules of a national securities association provide for the equitable
allocation of reasonable dues, fees and other charges among members and
issuers and other persons using any facility or system which the
association operates or controls. Specifically, by instituting a
uniform and consistent policy for assessing fees for the late payment
of service charges, to be imposed as described above, the Commission
believes the late payment of fees is reasonable and equitably
allocated.
It is therefore ordered, pursuant to Section 19(b)(2) of the
Act,\4\ that the proposed rule change (SR-NASD-94-34) is approved.
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\4\15 U.S.C. Sec. 78s(b)(2) (1988).
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For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\5\
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\5\17 CFR 200.30-4(a)(12) (1991).
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Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 94-22467 Filed 9-9-94; 8:45 am]
BILLING CODE 8010-01-M