Self-Regulatory Organizations; National Association of Securities Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Proposed Amendments to NASD Rule 1013 To Adopt a Standardized New Member Application Form (Form NMA), 16847-16849 [E6-4821]
Download as PDF
<![CDATA[
Federal Register / Vol. 71, No. 64 / Tuesday, April 4, 2006 / Notices
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 the Exchange. 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–CBOE–2006–28 and should
be submitted on or before April 25,
2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.13
Nancy M. Morris,
Secretary.
[FR Doc. E6–4799 Filed 4–3–06; 8:45 am]
(a) Filing of Application
(1)—No Change.
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53564; File No. SR–NASD–
2006–038]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Relating to Proposed
Amendments to NASD Rule 1013 To
Adopt a Standardized New Member
Application Form (Form NMA)
March 29, 2006.
sroberts on PROD1PC70 with NOTICES
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 March 3,
2006, 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 NASD. NASD
has designated the proposed rule change
as constituting a ‘‘non-controversial’’
rule change 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. The Commission is
publishing this notice to solicit
CFR 200.30–3(a)(12).
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 240.19–b4(f)(6). NASD gave the
Commission written notice of its intent to file this
proposed rule change on February 8, 2006.
VerDate Aug<31>2005
18:55 Apr 03, 2006
Jkt 208001
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD is proposing to amend Rule
1013 (New Member Application and
Interview) to adopt a standardized new
member application form, Form NMA,
to be used by all new applicants
applying for membership to NASD. The
proposed rule change also makes several
technical changes to NASD Rules 1013
and 1014. The proposed new form is
available at NASD, the Commission, and
at https://www.nasd.com. Below is the
text of the proposed rule change.
Proposed new language is in italics;
proposed deletions are in [brackets].
*
*
*
*
*
1013. New Member Application and
Interview
BILLING CODE 8010–01–P
13 17
comments on the proposed rule change
from interested persons.
(2) Contents
An Applicant shall submit an
application using NASD Form NMA.
The application shall include:
(A) Through (Q) No Change.
(R) [a Web CRD entitlement request
form] an NASD Entitlement Program
Agreement and Terms of Use and an
NASD Member Firm Account
Administrator Entitlement Form [a
Member Contact Questionnaire user
access request form].
(3) Electronic Filings
Upon approval of the Applicant’s
[Web CRD entitlement request form]
NASD Member Firm Account
Administrator Entitlement Form, the
Applicant shall submit its Forms U4 for
each Associated Person who is required
to be registered under NASD Rules, any
amendments to its Forms BD or U4 and
any Form U5 electronically via Web
CRD. [Upon approval of the Applicant’s
membership, the Applicant shall submit
any amendments to its Member Contact
Questionnaire electronically.]
(4) through (5) No Change.
(b) Membership Interview
(1) through (7) No Change.
*
*
*
*
*
1014. Department Decision
(a). Standards for Admission
(1) through (5) No Change.
(6) The communications and
operational systems that the Applicant
intends to employ for the purpose of
conducting business with customers
and other members are adequate and
PO 00000
Frm 00092
Fmt 4703
Sfmt 4703
16847
provide reasonably for business
continuity in each area set forth in Rule
1013(a)(2)([F]E)(xii);
(7) through (14) No change.
*
*
*
*
*
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
NASD staff has been working to make
its membership application process
more efficient and less burdensome for
both new applicants and the staff.
Applying for NASD membership is an
intensive process requiring considerable
attention to detail as well as a
substantial time commitment. NASD
Rule 1013 (New Member Application
and Interview) identifies the
requirements for submitting a new
member application for NASD
membership, including a listing of the
necessary documents and a requirement
that the applicant submit a
‘‘substantially complete’’ application.5
Pursuant to NASD Rule 1013(a)(4),
NASD can reject an application that is
not substantially complete.
Although NASD Rule 1013 contains a
listing of the requirements for a new
member application submission, NASD
continues to receive incomplete or
inadequate membership applications.
Such applications often require NASD
staff to serve requests for significant
additional information or
documentation to the applicant and
require a great deal of NASD staff time
and resources to process appropriately.
Applications initially submitted with
inadequate or incomplete information
result in increased processing times,
which can have the effect of
significantly delaying when an
applicant can begin conducting business
as a member of NASD.
To address these issues, NASD is
proposing to amend NASD Rule 1013 to
5 See
E:\FR\FM\04APN1.SGM
NASD Rule 1013(a)(4).
04APN1
16848
Federal Register / Vol. 71, No. 64 / Tuesday, April 4, 2006 / Notices
sroberts on PROD1PC70 with NOTICES
include a requirement to use New
Member Application Form (‘‘Form
NMA’’) to submit any applications for
NASD membership. Form NMA will not
establish new or additional content
requirements, which are already set
forth in NASD Rule 1013, but rather,
will be a means to assist new member
applicants in the preparation of a
complete application package. Form
NMA will be organized according to the
14 individual standards for membership
enumerated in NASD Rule 1014, and
will list all required exhibits, forms and
supporting documentation required in
an application submission.
Additionally, Form NMA will identify
certain information as mandatory or
required submissions in the initial
application. If such ‘‘mandatory’’
information is not provided in the
initial application submission, the
application will be deemed not
‘‘substantially complete’’ pursuant to
NASD Rule 1013(a)(4) and will be
rejected.6
By requiring member applicants to
use the prescribed Form NMA, NASD
expects to streamline the application
process by creating one unified
application process and clearly
outlining the information that must be
submitted to process the application.
Additionally, using the prescribed form
will expedite the application review and
approval process and will also lessen
the burden on NASD staff reviewing the
membership application by making the
process of reviewing applications for
completeness more efficient.
Once the proposed rule change
becomes effective and operative, NASD
will make Form NMA available to
applicants as part of NASD’s New
Member Application Package and
through NASD’s Web site. Applicants
will be required to submit Form NMA,
along with required exhibits, as an
original, signed paper form.
Additionally, NASD staff intends to
develop systems that will allow
applicants to submit Form NMA
electronically via Web CRD.
Finally, NASD is making several
technical changes. Specifically, NASD is
deleting NASD Rule 1013’s references to
the Web CRD entitlement request form
and Member Contact Questionnaire user
access request form and, where
appropriate, replacing those references
with the forms’ respective new titles—
6 NASD can deem an application to be not
‘‘substantially complete’’ for other reasons. Such a
determination is made based on the facts and
circumstances of the application, the information
and documentation requirements of NASD Rule
1013, the nature and complexity of the application,
and the nature and extent of the missing or
incomplete documentation.
VerDate Aug<31>2005
18:55 Apr 03, 2006
Jkt 208001
NASD Entitlement Program Agreement
and Terms of Use and NASD Member
Firm Account Administrator
Entitlement Form. NASD is also
changing an incorrect cite in NASD Rule
1014(a)(6) from NASD Rule
1013(a)(2)(F)(xii) to NASD Rule
1013(a)(2)(E)(xii).
This proposed rule change is effective
upon filing. NASD will announce the
implementation date of the proposed
rule change in a Notice to Members to
be published no later than 60 days
following Commission notice of the
filing of the rule change for immediate
effectiveness. The implementation date
will be 30 days from the publication of
the Notice to Members.
2. Statutory Basis
NASD believes that the proposed rule
change is consistent with Section 15A of
the Act,7 in general, and furthers the
objectives of Section 15A(b)(6) of the
Act,8 in particular, which requires,
among other things, 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. The
proposed rule change amends NASD
Rule 1013 to require new member
applications to be submitted using Form
NMA. The proposed rule change does
not propose any new or additional
content requirements for member
applications.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
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 were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule
change does not: (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
7 15
8 15
PO 00000
U.S.C. 78o–3.
U.S.C. 78o–3(b)(6).
Frm 00093
Fmt 4703
19(b)(3)(A) of the Act 9 and Rule 19b–
4(f)(6) thereunder.10
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.
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–2006–038 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–2006–038. 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 the 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
9 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
10 17
Sfmt 4703
E:\FR\FM\04APN1.SGM
04APN1
Federal Register / Vol. 71, No. 64 / Tuesday, April 4, 2006 / Notices
should submit only information that
you wish to make available publicly. All
submissions should refer to the File
Number SR–NASD–2006–038 and
should be submitted on or before April
25, 2006.
For the Commission, by the Division of
Market Regulation, pursuant to delegated
authority.11
Nancy M. Morris,
Secretary.
[FR Doc. E6–4821 Filed 4–3–06; 8:45 am]
BILLING CODE 8010–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–53562; File No. SR–NASD–
2006–005]
Self-Regulatory Organizations;
National Association of Securities
Dealers, Inc.; Notice of Filing of
Proposed Rule Change To Expand the
Scope of NASD Rule 2440 and
Interpretive Material 2440 Relating to
Fair Prices and Commissions To Apply
to All Securities Transactions
March 29, 2006.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (the
‘‘Act’’),1 and Rule 19b–4 thereunder,2
notice is hereby given that on January
19, 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. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
sroberts on PROD1PC70 with NOTICES
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
NASD proposes to expand the scope
of NASD Rule 2440 (Fair Prices and
Commissions) and Interpretive Material
(‘‘IM’’) 2440 relating to fair prices and
commissions to apply to all securities
transactions, whether executed over-thecounter (‘‘OTC’’) or on an exchange. The
text of the proposed rule change is
below. Proposed new language is in
italics; proposed deletions are in
brackets.
2440. Fair Prices and Commissions
In [’’over-the-counter’’] securities
transactions, whether in ‘‘listed’’ or
‘‘unlisted’’ securities, if a member buys
for his own account from his customer,
11 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
18:55 Apr 03, 2006
Jkt 208001
or sells for his own account to his
customer, he shall buy or sell at a price
which is fair, taking into consideration
all relevant circumstances, including
market conditions with respect to such
security at the time of the transaction,
the expense involved, and the fact that
he is entitled to a profit; and if he acts
as agent for his customer in any such
transaction, he shall not charge his
customer more than a fair commission
or service charge, taking into
consideration all relevant
circumstances, including market
conditions with respect to such security
at the time of the transaction, the
expense of executing the order and the
value of any service he may have
rendered by reason of his experience in
and knowledge of such security and the
market therefor.
IM–2440. Mark-Up Policy
The question of fair mark-ups or
spreads is one which has been raised
from the earliest days of the
Association. No definitive answer can
be given and no interpretation can be
all-inclusive for the obvious reason that
what might be considered fair in one
transaction could be unfair in another
transaction because of different
circumstances. In 1943, the
Association’s Board adopted what has
become known as the ‘‘5% Policy’’ to be
applied to transactions executed for
customers. It was based upon studies
demonstrating that the large majority of
customer transactions were effected at a
mark-up of 5% or less. The Policy has
been reviewed by the Board of
Governors on numerous occasions and
each time the Board has reaffirmed the
philosophy expressed in 1943. Pursuant
thereto, and in accordance with Article
VII, Section 1(a)(ii) of the By-Laws, the
Board has adopted the following
interpretation under Rule 2440.
It shall be deemed a violation of Rule
2110 and Rule 2440 for a member to
enter into any transaction with a
customer in any security at any price
not reasonably related to the current
market price of the security or to charge
a commission which is not reasonable.
(a) through (b) No change.
(c) Transactions to Which the Policy
is Applicable.
The policy applies to all securities[
handled in the over-the-counter market],
whether oil royalties or any other
security, in the following types of
transactions:
(1) through (5) No change.
(d) No change.
*
*
*
*
*
PO 00000
Frm 00094
Fmt 4703
Sfmt 4703
16849
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. 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
NASD Rule 2440 generally requires
NASD members, in any OTC transaction
with or for a customer, to charge only
fair commissions or charges, and to buy
or sell securities only at fair prices.3
Specifically, NASD Rule 2440 provides,
in part, that a member is required to buy
or sell a security at a fair price to
customers, ‘‘taking into consideration
all relevant circumstances, including
market conditions with respect to such
security at the time of the transaction,
the expense involved, and the fact that
he is entitled to a profit * * *’’ and if
the member acts as agent, the member
will not ‘‘charge his customer more than
a fair commission or service charge,
taking into consideration all relevant
circumstances, including market
conditions with respect to such security
at the time of the transaction, the
expense of executing the order and the
value of any service he may have
rendered by reason of his experience in
and knowledge of such security and the
market therefore.’’ The related Mark-Up
Policy, IM–2440, provides additional
guidance on mark-ups and fair pricing
of securities transactions with
customers and states that it is
inconsistent with just and equitable
principles of trade under NASD Rule
2110 for a member to enter into any
transaction with a customer in any
security at any price not reasonably
related to the current market price of the
security or to charge a commission that
is not reasonable.
NASD Rule 2440 and IM–2440 apply
only to OTC transactions. There is no
NASD rule that specifically addresses
commissions or mark-ups (and markdowns) for non-OTC transactions (i.e.,
exchange transactions). Although the
language of NASD Rule 2440 and IM–
2440 specifically limits their application
3 See
E:\FR\FM\04APN1.SGM
NASD Rule 2440.
04APN1
]]>Agencies
[Federal Register Volume 71, Number 64 (Tuesday, April 4, 2006)]
[Notices]
[Pages 16847-16849]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-4821]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-53564; File No. SR-NASD-2006-038]
Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to Proposed Amendments to NASD Rule 1013 To Adopt
a Standardized New Member Application Form (Form NMA)
March 29, 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 March 3, 2006, 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 NASD. NASD has
designated the proposed rule change as constituting a ``non-
controversial'' rule change 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. 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).
\4\ 17 CFR 240.19-b4(f)(6). NASD gave the Commission written
notice of its intent to file this proposed rule change on February
8, 2006.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
NASD is proposing to amend Rule 1013 (New Member Application and
Interview) to adopt a standardized new member application form, Form
NMA, to be used by all new applicants applying for membership to NASD.
The proposed rule change also makes several technical changes to NASD
Rules 1013 and 1014. The proposed new form is available at NASD, the
Commission, and at https://www.nasd.com. Below is the text of the
proposed rule change. Proposed new language is in italics; proposed
deletions are in [brackets].
* * * * *
1013. New Member Application and Interview
(a) Filing of Application
(1)--No Change.
(2) Contents
An Applicant shall submit an application using NASD Form NMA. The
application shall include:
(A) Through (Q) No Change.
(R) [a Web CRD entitlement request form] an NASD Entitlement
Program Agreement and Terms of Use and an NASD Member Firm Account
Administrator Entitlement Form [a Member Contact Questionnaire user
access request form].
(3) Electronic Filings
Upon approval of the Applicant's [Web CRD entitlement request form]
NASD Member Firm Account Administrator Entitlement Form, the Applicant
shall submit its Forms U4 for each Associated Person who is required to
be registered under NASD Rules, any amendments to its Forms BD or U4
and any Form U5 electronically via Web CRD. [Upon approval of the
Applicant's membership, the Applicant shall submit any amendments to
its Member Contact Questionnaire electronically.]
(4) through (5) No Change.
(b) Membership Interview
(1) through (7) No Change.
* * * * *
1014. Department Decision
(a). Standards for Admission
(1) through (5) No Change.
(6) The communications and operational systems that the Applicant
intends to employ for the purpose of conducting business with customers
and other members are adequate and provide reasonably for business
continuity in each area set forth in Rule 1013(a)(2)([F]E)(xii);
(7) through (14) No change.
* * * * *
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
NASD staff has been working to make its membership application
process more efficient and less burdensome for both new applicants and
the staff. Applying for NASD membership is an intensive process
requiring considerable attention to detail as well as a substantial
time commitment. NASD Rule 1013 (New Member Application and Interview)
identifies the requirements for submitting a new member application for
NASD membership, including a listing of the necessary documents and a
requirement that the applicant submit a ``substantially complete''
application.\5\ Pursuant to NASD Rule 1013(a)(4), NASD can reject an
application that is not substantially complete.
---------------------------------------------------------------------------
\5\ See NASD Rule 1013(a)(4).
---------------------------------------------------------------------------
Although NASD Rule 1013 contains a listing of the requirements for
a new member application submission, NASD continues to receive
incomplete or inadequate membership applications. Such applications
often require NASD staff to serve requests for significant additional
information or documentation to the applicant and require a great deal
of NASD staff time and resources to process appropriately. Applications
initially submitted with inadequate or incomplete information result in
increased processing times, which can have the effect of significantly
delaying when an applicant can begin conducting business as a member of
NASD.
To address these issues, NASD is proposing to amend NASD Rule 1013
to
[[Page 16848]]
include a requirement to use New Member Application Form (``Form NMA'')
to submit any applications for NASD membership. Form NMA will not
establish new or additional content requirements, which are already set
forth in NASD Rule 1013, but rather, will be a means to assist new
member applicants in the preparation of a complete application package.
Form NMA will be organized according to the 14 individual standards for
membership enumerated in NASD Rule 1014, and will list all required
exhibits, forms and supporting documentation required in an application
submission.
Additionally, Form NMA will identify certain information as
mandatory or required submissions in the initial application. If such
``mandatory'' information is not provided in the initial application
submission, the application will be deemed not ``substantially
complete'' pursuant to NASD Rule 1013(a)(4) and will be rejected.\6\
---------------------------------------------------------------------------
\6\ NASD can deem an application to be not ``substantially
complete'' for other reasons. Such a determination is made based on
the facts and circumstances of the application, the information and
documentation requirements of NASD Rule 1013, the nature and
complexity of the application, and the nature and extent of the
missing or incomplete documentation.
---------------------------------------------------------------------------
By requiring member applicants to use the prescribed Form NMA, NASD
expects to streamline the application process by creating one unified
application process and clearly outlining the information that must be
submitted to process the application. Additionally, using the
prescribed form will expedite the application review and approval
process and will also lessen the burden on NASD staff reviewing the
membership application by making the process of reviewing applications
for completeness more efficient.
Once the proposed rule change becomes effective and operative, NASD
will make Form NMA available to applicants as part of NASD's New Member
Application Package and through NASD's Web site. Applicants will be
required to submit Form NMA, along with required exhibits, as an
original, signed paper form. Additionally, NASD staff intends to
develop systems that will allow applicants to submit Form NMA
electronically via Web CRD[reg].
Finally, NASD is making several technical changes. Specifically,
NASD is deleting NASD Rule 1013's references to the Web CRD entitlement
request form and Member Contact Questionnaire user access request form
and, where appropriate, replacing those references with the forms'
respective new titles--NASD Entitlement Program Agreement and Terms of
Use and NASD Member Firm Account Administrator Entitlement Form. NASD
is also changing an incorrect cite in NASD Rule 1014(a)(6) from NASD
Rule 1013(a)(2)(F)(xii) to NASD Rule 1013(a)(2)(E)(xii).
This proposed rule change is effective upon filing. NASD will
announce the implementation date of the proposed rule change in a
Notice to Members to be published no later than 60 days following
Commission notice of the filing of the rule change for immediate
effectiveness. The implementation date will be 30 days from the
publication of the Notice to Members.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with
Section 15A of the Act,\7\ in general, and furthers the objectives of
Section 15A(b)(6) of the Act,\8\ in particular, which requires, among
other things, 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. The proposed rule change amends NASD Rule 1013 to
require new member applications to be submitted using Form NMA. The
proposed rule change does not propose any new or additional content
requirements for member applications.
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\7\ 15 U.S.C. 78o-3.
\8\ 15 U.S.C. 78o-3(b)(6).
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B. Self-Regulatory Organization's Statement on Burden on Competition
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 were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
Because the foregoing proposed rule change does not: (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 \9\ and Rule 19b-
4(f)(6) thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A).
\10\ 17 CFR 240.19b-4(f)(6).
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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.
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-2006-038 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-2006-038. 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 the
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
[[Page 16849]]
should submit only information that you wish to make available
publicly. All submissions should refer to the File Number SR-NASD-2006-
038 and should be submitted on or before April 25, 2006.
For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\11\
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\11\ 17 CFR 200.30-3(a)(12).
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Nancy M. Morris,
Secretary.
[FR Doc. E6-4821 Filed 4-3-06; 8:45 am]
BILLING CODE 8010-01-P
