66706 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Notices

18 17 CFR 200.30–3(a)(12).

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

2 17 CFR 240.19b–4.

3Securities Exchange Act Rel. No. 39322 (Nov.

13, 1997), 62 FR 62391.

4Telephone conversation with Alden S. Adkins,

General Counsel and Mary M. Dunbar, Assistant

General Counsel, NASDR, and Belinda Blaine,

Associate Director, Katherine A. England, Assistant

Director, and Mignon McLemore, Staff Attorney,

Division of Market Regulation, November 26, 1997.

5See Securities Exchange Act Rel. No. 30629

(April 23, 1992), 57 FR 18535 (April 30, 1992); and

Securities Exchange Act Rel. No. 32568 (July 1,

1993), 58 FR 36723 (July 8, 1993).

6See supra note 3. The notice contains a

complete list of disclosable disciplinary

information.

7 If the request is written and there is no

disclosable history, a record indicating same is sent

to the inquirer.

8See supra note 3.

9 15 U.S.C. 78s(b)(2).

10See supra note 4.

11 In approving this rule, the Commission notes

that it has considered the proposed rule’s impact on

efficiency, competition, and capital formation. The

ability to use electric media will most likely

enhance efficiency by decreasing the time between

when the request is made and when the response

is received. Additionally, the ready accessibility of

CRD information should positively affect

competition in the marketplace; disciplinary

histories will be more accessible to the public. 15

U.S.C. 78c(f).

its By-laws, Rules, or Procedures

through December 31, 1998.

IV. Conclusion

On the basis of the foregoing, the

Commission finds that the proposals are

consistent with the requirements of the

Act and in particular with the

requirements of Section 17A of the Act

and the rules and regulations

thereunder.

It is therefore Ordered, pursuant to

Section 19(b)(2) of the Act, that the

proposed rule changes of Philadep (File

No. SR–Philadep–97–04), of DTC (File

No. SR–DTC–97–16), and of NSCC (File

No. SR–NSCC–97–08) and the portion of

SCCP’s proposed rule change dealing

with its entering into the Agreement

(File No. SR–SCCP–97–04) be and

hereby are approved.

It is further Ordered, pursuant to

Section 19(b)(2) of the Act, that the

portion of SCCP’s proposed rule change

that amends its By-laws, Rule, or

Procedures (File No. SR–SCCP–97–04)

be and hereby is approved through

December 31, 1998.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.18

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–33194 Filed 12–18–97; 8:45 am]

BILLING CODE 8010–01–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39442; File No. SR–NASD–

97–78]

Self-Regulatory Organizations; Order

Granting Partial Approval on an

Accelerated Basis of Proposed Rule

Change by National Association of

Securities Dealers, Inc. Relating to the

Amended Interpretation of IM–8310–2,

Release of Disciplinary Information

December 11, 1997.

I. Introduction

On October 17, 1997, National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) submitted

to the Securities and Exchange

Commission (‘‘SEC’’ or ‘‘Commission’’),

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 which amends the

Interpretation on the Release of

Disciplinary Information, IM–8310–2 of

Rule 8310 of the Procedural Rules of the

NASD (‘‘Interpretation’’ or ‘‘IM–8310–

2’’). A notice of the proposed rule

change was published in the Federal

Register on November 21, 1997.3 The

Commission, to date, has received no

comment letters on the proposed rule

change. For the reasons discussed

below, the Commission is granting

partial accelerated approval of the

proposed rule change.

In its notice, filed on October 17,

1997, the NASD Regulation, Inc.

(‘‘NASDR’’) proposed to amend IM–

8310–2 to include the phrase

‘‘electronic inquiry’’ in the rule

language so that it could respond to

electronic inquiries, as well as written

or telephonic inquiries. In the notice,

the NASDR also proposed to amend the

rule language to include the additional

information required to be reported on

the amended Forms U–4, U–5, and BD.

The NASDR has requested that the

Commission approve, on an accelerated

basis, only that portion of the amended

rule language that allows it to respond

to electronic inquiries.4 Hence, the

Commission is partially approving, on

an accelerated basis, that portion of the

NASDR’s request which will give the

NASD the option of responding to the

electronic inquiries of persons or

entities requesting employment and

disciplinary history of its members and

their associated persons.

II. Description of Proposal

Under the NASD’s Public Disclosure

Program (‘‘PDP’’),5 the NASD, in

response to a written inquiry or

telephonic inquiry via a toll-free

telephone listing, releases certain

information contained in the Central

Registration Depository (‘‘CRD’’)

regarding the employment and

disciplinary history of its members and

their associated persons. When an

inquiry is made, if the broker-dealer or

associated person has a disciplinary

history, the NASD responds by sending

the inquirer a copy of the disclosable

information (e.g., information regarding

past and present employment history

with Association members).6 If there is

no history, the NASD responds by

informing the caller of this and

following up with a written record of

same, if so requested.7

In past months, the NASD has

undertaken a reassessment of the CRD to

take advantage of developing technology

and to improve its performance meeting

the NASD’s changing business needs.

As a result of this reassessment, the

NASD determined that the Internet

should be a component of its PDP. In an

effort to expand its PDP and make it

more accessible and convenient for

investors, the NASD’s proposal amends

the Interpretation to enable the NASD to

receive electronic inquiries as well as

written and telephonic inquiries.8

III. Discussion

NASDR has requested that the

Commission find good cause pursuant

to Section 19(b)(2) of the Act,9 for

approving, prior to the 30 day after

publication in the Federal Register, that

part of the proposed rule change that

permits the NASD to respond to

electronic inquiries.10 The Commission

has reviewed the NASDR’s proposed

rule change and believes, for reasons set

forth below, that the proposal is

consistent with the requirements of the

Act 11 and the rules and regulations

thereunder applicable to the NASD.

Specifically, the Commission believes

the proposal is consistent with Sections

15A(b)(6) and 15A(i) of the Act. Section

15A(b)(6) provides in relevant part that

the rules of the association be designed

to foster cooperation and coordination

with persons engaged in regulating and

processing information with respect to

securities and not to permit unfair

discrimination among customers,

issuers, brokers or dealers. Section

15A(i) of the Act requires the

Association to promptly respond in

writing to inquiries regarding

disciplinary actions involving its

members or associated persons.

The Commission finds good cause,

pursuant to Section 19(b)(2) of the Act,

for approving the proposed rule change

prior to the 30th day after publication in

the Federal Register. By amending IM–
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Notices 66707

12 15 U.S.C. 78s.

13 15 U.S.C. 78s(b)(2).

14 17 CFR 200.30–3(a)(12).

1On December 3, 1997, the NASD, through

Nasdaq, submitted Amendment No. 1 to the filing.

See letter from Robert E. Aber, Vice President and

General Counsel, Nasdaq, to Katherine A. England,

Assistant Director, Division of Market Regulation,

Commission, dated December 3, 1997.

2 [For purposes of the Rule 4500 Series, the term

‘‘shares’’ shall include common and preferred stock,

American Depositary Receipts (ADRs), warrants,

partnership interests, or any other security listed on

the Nasdaq National Market.]

3Total shares outstanding shall be the aggregate

of all classes of securities listed on the NNM

calculated at year end.

8310–2 to include the phrase

‘‘electronic inquiry,’’ the NASD has

made it easier and more convenient for

interested persons to inquire about the

employment and disciplinary history of

its members and their associated

persons. The Commission commends

any effort made to improve investor

access to information that could help

investors determine whether to conduct

or continue to conduct business with a

particular broker-dealer or associated

person. The Commission understands,

however, that the NASD intends to

disseminate responses to some inquiries

electronically. As with developing and

instituting information systems

technology, the Commission expects the

NASD, consistent with its statutory

duties, to assure itself that security

concerns (i.e., the security of its systems

and the immutability of the records after

transmittal) have been addressed. Thus,

in granting this partial accelerated

approval, the Commission notes that it

is approving only the NASD’s ability to

respond to electronic inquiries as if they

were either written or telephonic

inquiries.

Based on the foregoing, the

Commission deems it appropriate to

partially approve the proposed rule

change on an accelerated basis,

pursuant to Section 19(b) of the Act and

the rules and regulations thereunder.12

It is therefore ordered, pursuant to

section 19(b)(2) of the Act,13 that the

aforementioned portion of proposed

rule change SR–NASD–97–78 be, and

hereby is, approved.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.14

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–33128 Filed 12–18–97; 8:45 am]

BILLING CODE 8010–10–M

SECURITIES AND EXCHANGE

COMMISSION

[Release No. 34–39441; File No. SR–NASD–

97–83]

Self-Regulatory Organizations; Notice

of Filing of Proposed Rule Change by

National Association of Securities

Dealers, Inc. Relating to Listing Fees

for Nasdaq National Market Issuers

December 11, 1997.

Pursuant to Section 19(b)(1) of the

Securities Exchange Act of 1934

(‘‘Act’’), 15 U.S.C. 78s(b)(1), notice is

hereby given that on November 13,

1997, the National Association of

Securities Dealers, Inc. (‘‘NASD’’ or

‘‘Association’’), through its wholly

owned subsidiary, the Nasdaq Stock

Market, Inc. (‘‘Nasdaq’’), 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 the NASD.1 The

Commission is publishing this notice to

solicit comments on the proposed rule

change from interested persons.

1. Self-Regulatory Organization’s

Statement of the Terms of Substance of

the Proposed Rule Change

The NASD is proposing to amend

NASD Rule 4510 to revise the annual

fees for Nasdaq National Market issuers

and to make conforming changes to Rule

4520. Below is the text of the proposed

rule change. Proposed new language is

in italics; proposed deletions are in

brackets.

Rule 4510. The Nasdaq National Market

(a) Entry Fee

(1) When an issuer submits an

application for inclusion of any class of

its securities in the Nasdaq National

Market, it shall pay to The Nasdaq Stock

Market, Inc.:

(A) a one-time company listing fee of

$5,000 (which shall include a $1,000

non-refundable processing fee); and

[(B) for each class of security listed, a

fee calculated on a graduated rate of

$.005 per share for the first 5 million

shares, $.0025 per share for each share

between 5,000,001 and 15 million,

inclusive, and $.001 per share for each

share over 15 million, based on the total

number of shares outstanding. Entry

fees paid by a company for all classes

of securities listed on the Nasdaq

National Market, regardless of the date

those securities are listed, shall not

exceed $50,000 (inclusive of the $5,000

company listing fee).2]

(B) a fee calculated on total shares

outstanding according to the following

schedule:

Up to 1 million shares—$29,525

1+ to 2 million shares—$33,750

2+ to 3 million shares—$43,750

3+ to 4 million shares—$48,750

4+ to 5 million shares—$55,000

5+ to 6 million shares—$58,725

6+ to 7 million shares—$61,875

7+ to 8 million shares—$64,375

8+ to 9 million shares—$67,875

9+ to 10 million shares—$70,625

10+ to 11 million shares—$73,875

11+ to 12 million shares—$76,625

12+ to 13 million shares—$79,875

13+ to 14 million shares—$82,000

14+ to 15 million shares—$83,500

15+ to 16 million shares—$85,500

Over to 16 million shares—$90,000

[The entry fee shall be based on the

total number of] Total shares

outstanding means the aggregate of all

classes of equity securities [of the class]

to be included in the Nasdaq National

Market as shown in the issuer’s most

recent periodic report or in more recent

information held by Nasdaq or, in the

case of new issues, as shown in the

offering circular, required to be filed

with the issuer’s appropriate regulatory

authority. [and received by The Nasdaq

Stock Market, Inc.]

(3) no change

(4) no change

(b) Additional Shares

(1) The issuer of each class of

security, other than the American

Depositary Receipts, which is listed in

the Nasdaq National Market shall pay to

The Nasdaq [National] Stock Market,

Inc. the fee set forth in subparagraph (2)

below in connection with the issuance

of additional shares of each class of

listed security set forth In subparagraph

(3) below.

(2) no change

(3) no change

(4) Payment of the fee to The Nasdaq

Stock Market, Inc. shall be included

with the issuer notification to [the

Association] Nasdaq of the issuance of

additional shares of securities as

required under provisions of Rule

4310(c)(17) and Rule [4320(e)(16)]

4320(e)(15).

(c) Annual Fee—Domestic and Foreign

Issues

(1) As of January 1, [1993] 1998, the

issuer of each class of securities that is

a domestic or foreign issue listed in the

Nasdaq National Market shall pay to

The Nasdaq Stock Market, Inc. an

annual fee [(comprised of a base annual

fee and a variable annual fee) to be

computed as follows:] calculated on

total shares outstanding according to

the following schedule:

[(A) The base annual fee shall be

calculated on total shares outstanding 3

according to the following schedule:

Up to 1 million shares—$5,250