Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change Relating to a Session Fee Increase for the Regulatory Element of the Continuing Education Requirements of NASD Rule 1120, 75517-75519 [E5-7521]
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75517
Federal Register / Vol. 70, No. 243 / Tuesday, December 20, 2005 / Notices
‘‘the MSRB’s broad interpretation of the
meaning of solicitation means that
broker-dealers would be prohibited from
hiring outside persons to perform
necessary services given that they
would have to, as a practical matter,
attend * * * meetings with issuers and
will ultimately make the broker-dealer
more appealing to the issuer by doing a
good job.’’ PNC stated that including
conversations through or with
secondary participants of an issue
would not serve to enhance the goal of
the rule. Seasongood stated that all
contact by or through third parties
should be considered a solicitation.
MSRB Response. The proposed rule
change makes clear that, so long as nonaffiliated persons providing legal,
accounting, engineering or other
professional services 13 are not being
paid directly or indirectly for their
solicitation activities,14 they would not
become subject to Rule G–38. The
MSRB believes that this language
adequately addresses the concerns
raised by the commentators.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 35 days of the date of
publication of this notice in the Federal
Register or within such longer period (i)
as the Commission may designate up to
90 days of such date if it finds such
longer period to be appropriate and
publishes its reasons for so finding or
(ii) as to which the self-regulatory
organization consents, the Commission
will:
A. By order approve such proposed
rule change, or
B. Institute proceedings to determine
whether the proposed rule change
should be disapproved.
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:
13 The
proposed rule change does not enumerate
all professional services that may be provided in
connection with municipal securities business but
makes clear that such services are not strictly
limited to legal, accounting and engineering
services (e.g., another dealer serving as a syndicate
member).
14 The proposed rule change reminds dealers that
the term ‘‘payment’’ under MSRB rules is broadly
defined and can include, depending on the facts
and circumstances, quid pro quo arrangements
whereby a non-affiliated person solicits municipal
securities business for the dealer in exchange for
being hired by the dealer to provide other unrelated
services.
VerDate Aug<31>2005
19:23 Dec 19, 2005
Jkt 208001
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–MSRB–2005–11 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
Station Place, 100 F Street, NE.,
Washington, DC 20549–9303.
All submissions should refer to File
Number SR–MSRB–2005–11. 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 (https://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 MSRB’s offices. 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–MSRB–
2005–11 and should be submitted on or
before January 10, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.15
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7523 Filed 12–19–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52947; File No. SR–NASD–
2005–132]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change Relating to a Session Fee
Increase for the Regulatory Element of
the Continuing Education
Requirements of NASD Rule 1120
December 13, 2005.
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 November
22, 2005, 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, II, and III below, which Items
have been prepared by the NASD.
NASD has designated this proposal as
one establishing or changing a due, fee,
or other charge imposed by the NASD
under Section 19(b)(3)(A)(ii) of the Act,3
and Rule 19b–4(f)(2) thereunder,4 which
renders the proposal effective upon
filing with the Commission. 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
NASD is proposing to amend Section
4 of Schedule A to the NASD By-Laws
to increase the session fee for the
Regulatory Element of the continuing
education requirements of NASD Rule
1120. Below is the text of the proposed
rule change. Proposed new language is
in italics; proposed deletions are in
[brackets].
SCHEDULE A TO NASD BY-LAWS
*
*
*
(a) through (e) No change.
(f) There shall be a session fee of
[$60.00] $75.00 assessed as to each
individual who is required to complete
the Regulatory Element of the
Continuing Education Requirements
pursuant to Rule 1120.
*
*
*
*
*
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 15 U.S.C. 78s(b)(3)(A)(ii).
4 17 CFR 240.19b–4(f)(2).
2 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00073
Fmt 4703
Sfmt 4703
*
Section 4—Fees
1 15
15 17
*
E:\FR\FM\20DEN1.SGM
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Federal Register / Vol. 70, No. 243 / Tuesday, December 20, 2005 / Notices
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 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. 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
The Regulatory Element, a computerbased education program administered
by NASD to help ensure that registered
persons are kept up-to-date on
regulatory, compliance, and sales
practice matters in the industry, is a
component of the Securities Industry
Continuing Education Program
(‘‘Program’’) under NASD Rule 1120.
The Securities Industry/Regulatory
Council on Continuing Education
(‘‘Council’’) 5 was organized in 1995 to
facilitate cooperative industry/
regulatory coordination of the
administration and future development
of the Program in keeping with
applicable industry regulations and
changing industry needs. Its roles
include recommending and helping
develop specific content and questions
for the Regulatory Element, defining
minimum core curricula for the Firm
Element component of the Program, and
developing and updating information
about the Program for industry-wide
dissemination.
It is the Council’s responsibility to
maintain the Program on a revenue
neutral basis while maintaining
adequate reserves for unanticipated
future expenditures.6 In December 2003,
the Council voted to reduce the
Regulatory Element session fee from $65
to $60 effective January 1, 2004, in order
5 The Council currently consists of 20
individuals, 14 of whom are securities industry
professionals associated with NASD member firms,
and six of whom represent self-regulatory
organizations (the American Stock Exchange LLC,
the Chicago Board Options Exchange, Inc., the
Municipal Securities Rulemaking Board, NASD, the
New York Stock Exchange, Inc., and the
Philadelphia Stock Exchange, Inc.).
6 The Regulatory Element session fee was initially
set at $75 when NASD established the continuing
education requirements in 1995. The fee was
reduced in 1999 to $65 and again in 2004 to $60.
The proposed fee increase returns the Regulatory
Element session fee to its original level.
VerDate Aug<31>2005
19:23 Dec 19, 2005
Jkt 208001
to reduce the reserves to a level
necessary to support current and
expected programs and expenses. The
Council decided to review the reserve
level and evaluate the Regulatory
Element session fee on an annual basis.
The 2004 financial review and
evaluation produced no change in the
Regulatory Element session fee. In
September 2005, the Council’s annual
financial review and evaluation
revealed that unless the Regulatory
Element session fee were adjusted, the
Council’s reserves were likely to be
insufficient in 2006. The reasons for the
declining surplus are: (1) Lower than
projected session volume resulting in a
significant decrease in actual revenue
over projected revenue; (2) higher
delivery-related expenses beginning in
2006; and (3) costs associated with the
rebuilding of PROCTOR .7 At its
September 2005 meeting, the Council
voted unanimously to increase the
Regulatory Element session fee from $60
to $75, effective January 1, 2006, in
order to meet costs and maintain an
adequate reserve in 2006.
The proposed implementation date is
January 1, 2006.
1. Statutory Basis
NASD believes that the proposed rule
change is consistent with the provisions
of Section 15A of the Act,8 in general,
and furthers the objectives of Sections
15A(b)(5) and 15A(b)(6) of the Act in
particular.9 Section 15A(b)(5) of the Act
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. Further, Section 15A(b)(6) of
the Act provides that NASD rules must
be designed to prevent fraudulent and
manipulative acts and practices, to
promote just and equitable principles of
trade, and, in general, to protect
investors and the public interest. NASD
believes that the proposed rule change
is designed to accomplish these ends by
enabling the Program to be maintained
on a revenue neutral basis while
maintaining adequate reserves for
unanticipated future expenditures.
7 PROCTOR is a technology system that
supports computer-based testing and training. The
Regulatory Element program uses PROCTOR to
package content, deliver, score and report results,
and maintain and generate statistical data related to
the Program.
8 15 U.S.C. 78o–3.
9 15 U.S.C. 78o–3(b)(5) and (b)(6).
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
B. Self-Regulatory Organization’s
Statement on Burden on Competition
NASD does not believe that the
proposed rule change will impose 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
NASD has neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section
19(b)(3)(A)(ii) of the Act 10 and Rule
19b–4(f)(2) thereunder,11 because it
establishes or changes a due, fee, or
other charge imposed by the NASD.
Accordingly, the proposal will take
effect upon filing with the Commission.
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.12
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an e-mail to rulecomments@sec.gov. Please include File
Number SR–NASD–2005–132 on the
subject line.
Paper Comments
• Send paper comments in triplicate
to Jonathan G. Katz, Secretary,
Securities and Exchange Commission,
100 F Street, NE., Washington, DC
20549–9303.
All submissions should refer to File
Number SR–NASD–2005–132. This file
number should be included on the
subject line if e-mail is used. To help the
10 15
U.S.C. 78s(b)(3)(A)(ii).
CFR 240.19.b–4(f)(2).
12 15 U.S.C. 78s(b)(3)(C).
11 17
E:\FR\FM\20DEN1.SGM
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Federal Register / Vol. 70, No. 243 / Tuesday, December 20, 2005 / Notices
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 (https://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 the filing also will be
available for inspection and copying at
the principal offices of the 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–2005–132 and
should be submitted on or before
January 10, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Jonathan G. Katz,
Secretary.
[FR Doc. E5–7521 Filed 12–19–05; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–52954; File No. SR–NYSE–
2005–87]
Self-Regulatory Organizations; New
York Stock Exchange, Inc.; Notice of
Filing and Order Granting Accelerated
Approval of a Proposed Rule Change
and Amendment No. 1 Thereto
Relating to the Pilot to Put Into
Operation Phase 1 of the NYSE
HYBRID MARKET SM
December 14, 2005.
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 December
9, 2005, the New York Stock Exchange,
Inc. (‘‘NYSE’’ or ‘‘Exchange’’) filed with
the Securities and Exchange
Commission (‘‘Commission’’) the
proposed rule change as described in
13 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
1 15
VerDate Aug<31>2005
19:23 Dec 19, 2005
Jkt 208001
Items I and II below, which Items have
been prepared by the Exchange. On
December 13, 2005, the Exchange filed
Amendment No. 1 to the proposed rule
change.3 The Commission is publishing
this notice and order to solicit
comments on the proposed rule change,
as amended, from interested persons
and to approve the proposed rule
change, as amended, on an accelerated
basis.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange is proposing a pilot to
put into operation Phase 1 of the NYSE
HYBRID MARKET SM (‘‘Hybrid
Market’’) initiative, as proposed in SR–
NYSE–2004–05 and amendments
thereto (‘‘Hybrid Market filings’’) with
respect to a group of securities trading
on the Exchange (‘‘Pilot’’).4 In addition,
the Pilot will implement certain system
changes discussed in SR–NYSE–2005–
57.5 This filing sets forth amended rules
(previously described in the Hybrid
Market filings) which would be
operational during the Phase 1 pilot as
well as certain new proposals, discussed
herein. The text of the proposed rule
change is available on NYSE’s Web site
(https://www.nyse.co), at the principal
office of the Exchange, 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, the
Exchange 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
3 See Partial Amendment dated December 13,
2005 (‘‘Amendment No. 1’’). In Amendment No. 1,
the Exchange submitted Exhibit 3 to the proposed
rule change, which identified the securities that
would be included in the Pilot, and corrected a
typographical error.
4 See Securities Exchange Act Release No. 50173
(August 10, 2004), 69 FR 50407 (August 16, 2004)
(Amendment No. 1 to SR–NYSE–2004–05);
Securities Exchange Act Release No. 50667
(November 15, 2004), 69 FR 67980 (November 22,
2004) (Amendment Nos. 2 and 3 to SR–NYSE–
2004–05) (The Exchange withdrew Amendment No.
4 and replaced it with Amendment No. 5);
Securities Exchange Act Release No. 51906 (June
22, 2005), 70 FR 37463 (June 29, 2005) (Amendment
No. 5 to SR–NYSE–2004–05). See also Amendment
No. 6 to SR–NYSE–2004–05 (September 16, 2005)
and Amendment No. 7 to SR–NYSE–2004–05
(October 10, 2005).
5 See Securities Exchange Act Release No. 52362
(August 30, 2005), 70 FR 53701 (September 9, 2005)
(SR–NYSE–2005–57). While submitted as effective
upon filing, the Exchange intended to implement
these changes upon approval of the Hybrid Market
filings by the Commission, if such approval is
granted.
PO 00000
Frm 00075
Fmt 4703
Sfmt 4703
75519
statements may be examined at the
places specified in Item III below. The
Exchange 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
The Exchange proposes a Pilot to put
into operation Phase 1 of the Hybrid
Market initiative with respect to a group
of securities, known as Phase 1 6 Pilot
securities (‘‘Pilot securities’’). The Pilot
would commence following
Commission approval of the Pilot,
during the week of December 12, 2005
and would terminate the earlier of: (1)
90 calendar days from the date of
Commission approval, if granted, or (2)
Commission approval of the Exchange’s
Hybrid Market proposal, if granted.
Approximately 200 securities out of
the 3,600 securities listed on the
Exchange (approximately 5%) have
been identified as Pilot securities and
are listed on Exhibit 3 of the filing.7 In
addition, the list of Pilot securities will
be posted on the Exchange’s Web site.
The Pilot will allow the Exchange to
conduct real-time system and user
testing of certain features of the Hybrid
Market filings in order to be in a
position to comply with the
implementation of Regulation NMS.8
The Exchange believes the Pilot will
prove beneficial from both a technology
and a training perspective. It will give
the Exchange the opportunity to identify
and address any system problems and to
identify and incorporate beneficial
system changes that become apparent as
a result of usage in real time and under
real market conditions. The ability to
have such real time user interface will
be invaluable, as it is impossible to
accurately anticipate behavioral changes
in a development or mock-trading
6 See Securities Exchange Act Release No. 51906
(June 22, 2005), 70 FR 37463 (June 29, 2005)
(Amendment No. 5 to SR–NYSE–2004–05).
7 The NYSE selected the Pilot securities based on
the following criteria: (1) Trading location so as to
include in the Pilot securities from each room and
post on the floor; (2) crowd participation so as to
include securities that generally have crowd
participation; (3) trading characteristics so as to
include securities whose trading characteristics are
typically less volatile to minimize the likelihood of
disruptions during the systems testing; and (4)
specialist firm so as to include each of the equity
specialist firms on the floor. The Pilot securities
represent approximately 10% of the average daily
NYSE trading volume. Telephone call between
Nancy Reich Jenkins, NYSE and Kelly Riley, SEC
on December 14, 2005.
8 See Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496 (June 29, 2005).
E:\FR\FM\20DEN1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 243 (Tuesday, December 20, 2005)]
[Notices]
[Pages 75517-75519]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E5-7521]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-52947; File No. SR-NASD-2005-132]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change Relating to a Session Fee Increase for the
Regulatory Element of the Continuing Education Requirements of NASD
Rule 1120
December 13, 2005.
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 November 22, 2005, 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, II,
and III below, which Items have been prepared by the NASD. NASD has
designated this proposal as one establishing or changing a due, fee, or
other charge imposed by the NASD under Section 19(b)(3)(A)(ii) of the
Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal
effective upon filing with the Commission. The Commission is publishing
this notice to solicit comments on the proposed rule change from
interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ 15 U.S.C. 78s(b)(3)(A)(ii).
\4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD is proposing to amend Section 4 of Schedule A to the NASD By-
Laws to increase the session fee for the Regulatory Element of the
continuing education requirements of NASD Rule 1120. Below is the text
of the proposed rule change. Proposed new language is in italics;
proposed deletions are in [brackets].
SCHEDULE A TO NASD BY-LAWS
* * * * *
Section 4--Fees
(a) through (e) No change.
(f) There shall be a session fee of [$60.00] $75.00 assessed as to
each individual who is required to complete the Regulatory Element of
the Continuing Education Requirements pursuant to Rule 1120.
* * * * *
[[Page 75518]]
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 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. 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
The Regulatory Element, a computer-based education program
administered by NASD to help ensure that registered persons are kept
up-to-date on regulatory, compliance, and sales practice matters in the
industry, is a component of the Securities Industry Continuing
Education Program (``Program'') under NASD Rule 1120. The Securities
Industry/Regulatory Council on Continuing Education (``Council'') \5\
was organized in 1995 to facilitate cooperative industry/regulatory
coordination of the administration and future development of the
Program in keeping with applicable industry regulations and changing
industry needs. Its roles include recommending and helping develop
specific content and questions for the Regulatory Element, defining
minimum core curricula for the Firm Element component of the Program,
and developing and updating information about the Program for industry-
wide dissemination.
---------------------------------------------------------------------------
\5\ The Council currently consists of 20 individuals, 14 of whom
are securities industry professionals associated with NASD member
firms, and six of whom represent self-regulatory organizations (the
American Stock Exchange LLC, the Chicago Board Options Exchange,
Inc., the Municipal Securities Rulemaking Board, NASD, the New York
Stock Exchange, Inc., and the Philadelphia Stock Exchange, Inc.).
---------------------------------------------------------------------------
It is the Council's responsibility to maintain the Program on a
revenue neutral basis while maintaining adequate reserves for
unanticipated future expenditures.\6\ In December 2003, the Council
voted to reduce the Regulatory Element session fee from $65 to $60
effective January 1, 2004, in order to reduce the reserves to a level
necessary to support current and expected programs and expenses. The
Council decided to review the reserve level and evaluate the Regulatory
Element session fee on an annual basis. The 2004 financial review and
evaluation produced no change in the Regulatory Element session fee. In
September 2005, the Council's annual financial review and evaluation
revealed that unless the Regulatory Element session fee were adjusted,
the Council's reserves were likely to be insufficient in 2006. The
reasons for the declining surplus are: (1) Lower than projected session
volume resulting in a significant decrease in actual revenue over
projected revenue; (2) higher delivery-related expenses beginning in
2006; and (3) costs associated with the rebuilding of PROCTOR
[supreg].\7\ At its September 2005 meeting, the Council voted
unanimously to increase the Regulatory Element session fee from $60 to
$75, effective January 1, 2006, in order to meet costs and maintain an
adequate reserve in 2006.
---------------------------------------------------------------------------
\6\ The Regulatory Element session fee was initially set at $75
when NASD established the continuing education requirements in 1995.
The fee was reduced in 1999 to $65 and again in 2004 to $60. The
proposed fee increase returns the Regulatory Element session fee to
its original level.
\7\ PROCTOR [supreg] is a technology system that supports
computer-based testing and training. The Regulatory Element program
uses PROCTOR [supreg] to package content, deliver, score and report
results, and maintain and generate statistical data related to the
Program.
---------------------------------------------------------------------------
The proposed implementation date is January 1, 2006.
1. Statutory Basis
NASD believes that the proposed rule change is consistent with the
provisions of Section 15A of the Act,\8\ in general, and furthers the
objectives of Sections 15A(b)(5) and 15A(b)(6) of the Act in
particular.\9\ Section 15A(b)(5) of the Act 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. Further, Section 15A(b)(6) of the Act provides that NASD
rules must be designed to prevent fraudulent and manipulative acts and
practices, to promote just and equitable principles of trade, and, in
general, to protect investors and the public interest. NASD believes
that the proposed rule change is designed to accomplish these ends by
enabling the Program to be maintained on a revenue neutral basis while
maintaining adequate reserves for unanticipated future expenditures.
---------------------------------------------------------------------------
\8\ 15 U.S.C. 78o-3.
\9\ 15 U.S.C. 78o-3(b)(5) and (b)(6).
---------------------------------------------------------------------------
B. Self-Regulatory Organization's Statement on Burden on Competition
NASD does not believe that the proposed rule change will impose 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
NASD has neither solicited nor received comments on the proposed
rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become effective pursuant to Section
19(b)(3)(A)(ii) of the Act \10\ and Rule 19b-4(f)(2) thereunder,\11\
because it establishes or changes a due, fee, or other charge imposed
by the NASD. Accordingly, the proposal will take effect upon filing
with the Commission. 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.\12\
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\10\ 15 U.S.C. 78s(b)(3)(A)(ii).
\11\ 17 CFR 240.19.b-4(f)(2).
\12\ 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 is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://
www.sec.gov/rules/sro.shtml); or
Send an e-mail to rule-comments@sec.gov. Please include
File Number SR-NASD-2005-132 on the subject line.
Paper Comments
Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
All submissions should refer to File Number SR-NASD-2005-132. This file
number should be included on the subject line if e-mail is used. To
help the
[[Page 75519]]
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 (https://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 the filing also will be
available for inspection and copying at the principal offices of the
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-2005-132 and should be submitted on or before January 10, 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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Jonathan G. Katz,
Secretary.
[FR Doc. E5-7521 Filed 12-19-05; 8:45 am]
BILLING CODE 8010-01-P
