Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Notices 35693

1 15 U.S.C. 78s(b)(1).

2 17 CFR 240.19b–4.

3The NASD filed its proposed rule change on

March 31, 2000. On April 4, 2000, the NASD filed

Amendment No. 1 that entirely replaced the

original rule filing.

4See Letter from Robert E. Abner, General

Counsel and Senior Vice President, Nasdaq, to

Katherine A. England, Assistant Director, Division

of Market Regulation (‘‘Division’’), Commission

(May 16, 2000). Amendment No. 2 corrected a

typographical error that appeared in the proposed

rule language and clarified that the Mutual Fund

Quotation Service includes only 73.8% of the total

open-end and closed-end fund population.

5See Securities Exchange Act Release No. 22264

(July 23, 1985), 50 FR 30899 (July 29, 1985).

6See NASD Rule 6800.

7See id.

8See NASD Rule 7010.

9See NASD Rule 7090.

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–42831; File No. SR–NASD–

00–16]

Self Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

the National Association of Securities

Dealers, Inc. Relating to Amendments

to Minimum Listing Requirements for

the Inclusion and Maintenance of Open

and Closed-End Funds in Nasdaq’s

Mutual Fund Quotation Service

May 25, 2000.

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 4,

2000, the National Association of

Securities Dealers, Inc. (‘‘NASD’’)

through its wholly owned subsidiary

The Nasdaq Stock Market, Inc.

(‘‘Nasdaq’’) file with the Securities and

Exchange Commission (‘‘SEC’’ or

‘‘Commission’’) the proposed rule

change described in Items I, II, and III

below, which Items have been prepared

by Nasdaq.3 On May 16, 2000, the

Nasdaq submitted Amendment No. 2 to

the proposed rule change.4 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

Nasdaq is proposing to amend NASD

Rule 6800 regarding the minimum

listing requirements for the inclusion

and maintenance of open and closedend funds in Nasdaq’s Mutual Fund

Quotation Service (‘‘MFQS’’) Proposed

new language is in italics; proposed

deletions are in brackets.

* * * * *

6800. MUTUAL FUND QUOTATION

SERVICE

(a)–(b) No Change

(c) News Media Lists

(1) (A) An eligible open end fund

shall be authorized for inclusion in the

News Media List released by the

Association if it has at least 1,000

shareholders or $25 million in net

assets.

(B) An eligible closed-end funds shall

be authorized for inclusion in the News

Media List released by the Association

if it has at least $60 [100] million in net

assets.

(C) Compliance with subparagraphs

(1)(A) and (B) shall be certified by the

fund to the Association at the time of

initial application for inclusion in the

List.

(2) (A) An authorized open-end fund

shall remain included in the New Media

List if it has either 750 shareholders or

$15 million in net assets.

(B) An authorized closed-end fund

shall remain included in the News

Media List if it has $30 [60] million in

net assets.

(C) Compliance with subparagraphs

(2)(A) and (B) shall be certified to the

Association upon written request by the

Association.

(d) Supplemental List

An eligible open-end or closed-end

fund shall be authorized for inclusion in

the Supplemental List released to

vendors of Nasdaq Level I Service if it

meets one of the criteria set out in

subparagraph (1), subparagraph (2), or

subparagraph (3) below:

(1) the fund has net assets of $10

million or more; or

(2) the fund has had two full years of

operation; or

(3) the investment management firm

managing the fund has:

(A) at least one other fund listed on

the Mutual Fund Quotation Service that

has net assets of $10 million or more;

and

(B) at least $15 million in total assets

of open-end, closed-end, and/or moneymarket funds under management.

(e) 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, the

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. 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

Nasdaq is proposing to amend NASD

Rule 6800 regarding the minimum

listing requirements for the inclusion

and maintenance of open and closedend funds in the Service. The MFQS

was created to collect daily price and

related data for mutual funds and

money market funds and to disseminate

that information to the news media and

market data vendors.5 Currently, the

MFQS disseminates the valuation data

for over 11,000 funds. This information

dissemination process is facilitated by

the use of web browser-based

technology, which enables funds

included in the Service, or the pricing

agents designated by such funds, to

transmit directly to Nasdaq a multitude

of pricing information, including

information about a fund’s net asset

value, offer price, and closing market

price.

Funds must meet minimum eligibility

criteria in order to be included in the

MFQS.6 The MFQS has two ‘‘lists’’ in

which a fund may be included—the

News Media List and the Supplemental

List—and each list has its own initial

inclusion requirements.7 The News

Media List also has maintenance/

combined inclusion requirements. If a

fund qualifies for the News Media List,

pricing information about the fund is

eligible for inclusion in the fund tables

of newspapers and is also eligible for

dissemination over Nasdaq’s Level 1

Service, which is distributed by market

data vendors.8 if a fund qualifies for the

Supplemental List, the pricing

information about that fund generally is

not included in newspaper fund tables,

but is disseminated over Nasdaq’s Level

1 Service. The Supplemental List thus

provides significant visibility for funds

that do not otherwise qualify for

inclusion in the News Media List. Each

fund incurs an annual fee for inclusion

in the Service.9

Nasdaq maintains that the Service

provides valuable pricing information

for a large portion of funds for which

there is significant investor interest.

According to Investment Company

Institute (‘‘ICI’’) data, however, the

MFQS is currently only capturing

35694 Federal Register / Vol. 65, No. 108 / Monday, June 5, 2000 / Notices

10See Amendment No. 2, supra note 4.

11 15 U.S.C. 78o–3(b)(6).

12 15 U.S.C. 78k–1.

13 15 U.S.C. 78o–3(b)(6).

14 15 U.S.C. 78k–1(a)(1)(C).

15 15 U.S.C. 78o–3(b)(6).

16 15 U.S.C. 78k–1(a)(1)(C). 17 17 CFR 200.30–3(a)(12).

pricing information for approximately

73.8% of the total fund population.10

In light of the foregoing, Nasdaq

proposes to amend the MFQS inclusion

criteria for both the Supplemental and

News Media List by expanding the

universe of funds that are eligible for

inclusion in the Service. Nasdaq

proposes to lower both the initial and

maintenance requirements for closedend funds to participate in the News

Media List. Currently, in order to

qualify initially for inclusion in the

News Media List, a closed-end fund

must have at least $100 million in net

assets. To remain in the News Media

List, a closed-end fund must maintain at

least $60 million in net assets. The

proposed rule change would lower the

net asset requirement for a closed-end

fund to qualify initially for inclusion in

the News Media List to at least $60

million in net assets. The net asset

requirement for a closed-end fund to

remain included in the New Media List

would be lowered to at least $30

million.

Nasdaq also proposes to amend the

inclusion criteria for the Supplemental

List. At the present time, an open-end or

closed-end fund qualifies for inclusion

in the Supplemental List if the fund

either has at least $10 million in net

assets or has had two full years of

operation. Nasdaq proposes to provide a

third alternative means for a fund to be

included in the Service. Under this

alternative, a fund would qualify for the

MFQS if the investment firm that

manages the fund has at least one other

fund listed on MFQS that has $10

million in assets. In addition, the firm

must have at least $15 million from

open-end, closed-end, and/or money

market funds under management.

Nasdaq notes that managed assets from

other sources—such as pension funds—

would not be included for purposes of

determining whether the investment

firm meets the requirement that it

manage at least $15 million in fundrelated assets.

Nasdaq represents that the proposed

rule change would provide daily pricing

information to the investing public for

funds that have a significant investor

interest. In addition, Nasdaq estimates

that 2,500 of the 2,800 funds that are not

currently eligible for inclusion in the

MFQS would qualify under the

proposed new standards.

2. Statutory Basis

Nasdaq believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(6)11 and

Section 11A 12 of the Act. Section

15A(b)(6) 13 of the Act requires the rules

of a registered national securities

association to foster cooperation and

coordination with persons engaged in

processing information with respect to

securities, to remove impediments to

and perfect the mechanism of a free and

open market and a national market

system, and, in general, to protect

investors and the public interest. In

Section 11A(a)(1)(C), 14 the Congress

found that it is in the public interest and

appropriate for the protection of

investors and the maintenance of fair

and orderly markets to assure the

availability to brokers, dealers, and

investors of information with respect to

quotations and transactions in

securities.

Nasdaq believes that the proposed

rule change is consistent with the

provisions of Sections 15A(b)(6)15 and

11A(a)(1)(C) 16 of the Act because it

protects investors and the public

interest by promoting better processing

of fund pricing information. Nasdaq

represents that the proposed new listing

criteria will provide greater

transparency to the markets by

providing pricing information for a

broader base of funds for which there is

significant investor interest. Nasdaq

believes that by providing listed status

only to bona fide investment companies

with a sufficient investor base and

trading interest, the proposed new

listing standards will serve as a means

for the marketplace to screen issuers

and maintain fair and orderly markets.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

Nasdaq 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

Nasdaq did not solicit or receive

written comments on the proposed rule

change.

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 Exchange 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 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 at

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 No.

SR–NASD–00–16 and should be

submitted by June 26, 2000.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.17

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 00–13957 Filed 6–2–00; 8:45 am]

BILLING CODE 8010–01–M

DEPARTMENT OF STATE

[Public Notice No. 3331]

Office of Mexican Affairs; Notice of

Receipt of Application for a

Presidential Permit for a Conveyor Belt

To Be Constructed and Maintained on

the Borders of the United States

AGENCY: Department of State.

Notice is hereby given that the

Department of State has received an

application from Aggregate Products,

Incorporated of Salton Sea Beach,

California, for a Presidential Permit,