Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices 1939

4 17 CFR 200.30–3(a)(12).

1 15 U.S.C. § 78s(b)(1).

represented a 19% decline in the

average. Article IX, Rule 10A has never

been invoked, as the DJIA has not

declined by 250 points or more since

the rule was adopted. The largest

decline occurred on March 8, 1996,

when the DJIA fell intra-day 217 points

below its previous day’s closing value.

Today, with the DJIA at about 6500

points, a 250 or 400 point drop would

represent a much smaller percentage

decline in the average (3.8% and 6.2%,

respectively).

The proposed circuit breakers of 350

and 550 points would represent,

respectively, a 5.4% and 8.5% decline

in the DJIA, which are significant

market declines and thus represent

appropriate levels at which to halt

trading. The proposed trigger values

take into account the rise in market

values since the Rule was first adopted,

while also recognizing the fact that the

original trigger values have never been

reached. The Exchange believes that the

new trigger values in Article IX, Rule

10A should be stated in absolute

numbers, rather than in terms of

percentages of the DJIA, in order to

facilitate understanding by all market

participants as to exactly when the

circuit breakers will be utilized.

The Exchange seeks to effect these

changes on a one-year pilot basis. The

adoption of amendments to Article IX,

Rule 10A would be contingent upon the

adoption of amended rules or

procedures substantively identical to

this rule by:

(1) All United States stock exchanges

and the National Association of

Securities Dealers, Inc. with respect to

the trading of stocks, stock options and

stock index options; and,

(2) All United States futures

exchanges with respect to the trading of

stock index futures and options on such

futures.

The exchange believes that an allmarket trading halt requirement at

appropriate levels will promote stability

and investor confidence during periods

of significant stress by providing market

participants with a reasonable

opportunity to become aware of and

respond to significant price movements,

thereby facilitating in an orderly manner

the maintenance of an equilibrium

between buying and selling interest.

2. Basis

The exchange believes that the

proposed rule change is consistent with

Section 6(b)(5) of the Act in that it is

designed to promote just and equitable

principles of trade. The Exchange

believes that amending Article IX, Rule

10A on a pilot basis is consistent with

these objectives in that the revised

trading halt triggers during a period of

significant stress can be expected to

provide market participants with a

reasonable opportunity to become aware

of and respond to significant price

movements, thereby facilitating, in an

orderly manner, the maintenance of an

equilibrium between buying and selling

interest.

B. Self-Regulatory Organization’s

Statement on Burden on Competition

The Exchange does not believe that

the proposed rule change will impose

any inappropriate burden on

competition.

C. Self-Regulatory Organization’s

Statement on Comments on the

Proposed Rule Change Received from

Members, Participants or Others

No written comments were solicited

or received with respect to 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 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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. 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

Section, 450 Fifth Street, N.W.,

Washington, D.C. Copies of such filing

will also be available for inspection and

copying at the principal office of the

CHX. All submissions should refer to

File No. SR–CHX–96–33 and should be

submitted by January 27, 1997.

For the Commission, by the Division of

Market Regulation, pursuant to delegated

authority.4

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–809 Filed 1–13–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38126; File No. SR–NASD–

96–56]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by National

Association of Securities Dealers, Inc.

Relating to Increase in Minimum Gross

Income Assessment

January 6, 1997.

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

Securities Exchange Act of 1934

(‘‘Act’’),1 notice is hereby given that on

December 24, 1996, the National

Association of Securities Dealers, Inc.

(‘‘NASD’’ or ‘‘Association’’) 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. 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 Regulation, Inc. (‘‘NASD

Regulation’’) is proposing a rule change

to amend Section 1 to Schedule A of the

By-Laws to increase the minimum gross

income assessment from $850.00 to

$1,200.00. Proposed new language is

italicized; proposed deletions are in

brackets.

Schedule A to the NASD By-Laws

Assessments and fees pursuant to the

provisions of Article VI of the By-Laws

of the Corporation, shall be determined

on the following basis.

Section 1—Assessments

Each member shall pay an annual

assessment composed of:

(a) An amount equal to the greater of

$1,200.00[850.00] or the total of:

(i) 0.125% of the annual gross revenue

from state and municipal securities

transactions,
1940 Federal Register / Vol. 62, No. 9 / Tuesday, January 14, 1997 / Notices

2See, Report Pursuant To Section 21(a) Of The

Securities Exchange Act Of 1934 Regarding the

NASD And the Nasdaq Stock Market, U.S.

Securities and Exchange Commission (August 8,

1996).

3 15 U.S.C. § 78o–3(b)(5).

4 15 U.S.C. § 78s(b)(3)(A).

5 17 CFR 19b–4(e).

6 17 CFR 200.30–3(a)(12).

1The Commission notes that the NASD filed a

technical amendment to the proposal (Amendment

No. 1) on January 3, 1997.

(ii) 0.125% of annual gross revenue

from other over-the-counter securities

transactions,

(iii) 0.125% of the annual gross

revenue from U.S. Government

securities transactions, and

(iv) With respect to members whose

books, records, and financial operations

are examined by the NASD, 0.125% of

annual gross revenue from securities

transactions executed on an exchange.

Each member is to report annual gross

revenue as defined in Section 5 of this

Schedule, for the preceding calendar

year.

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

Article VI of the By-Laws authorizes

the NASD Board of Governors to levy

fees, dues and assessments to be paid by

members to defray reasonable expenses

incurred in the administration of the

work of the NASD. Currently, each

member of the NASD is required to pay

an annual gross income assessment of

the greater of (i) $850.00 or (ii) the total

of 0.125% of the annual gross revenue

from state and municipal securities

transactions, 0.125% of annual gross

revenue from other over-the-counter

securities transactions, 0.125% of the

annual gross revenue from U.S.

Government securities transactions,

and, with respect to members whose

books, records, and financial operations

are examined by the NASD, 0.125% of

annual gross revenue from securities

transactions executed on an exchange.

The minimum gross income

assessment of $850.00 has not been

changed since 1989. Due to inflationary

pressures and increased regulatory

costs, the NASD is proposing to raise

the minimum gross income assessment

from $850.00 to $1,200.00. The 1997

expenses of NASD Regulation are

expected to grow by $43 million or 24%

as the result of various factors,

including, among other things,

initiatives designed to respond to the

findings by the SEC in its recent report

concerning the NASD,2 completion of a

regulatory transition plan for the

examination program, development of

the new Central Registration Depository

system, further implementation of the

Arbitration Policy Task Force

recommendations and continued

development of an Order Audit Trail

System. The proposed increase in the

minimum gross income assessment,

along with anticipated revenue growth

in other areas, is expected to help defray

the significant increase in regulatory

costs anticipated to be incurred by

NASD Regulation.

The NASD believes that the proposed

rule change is consistent with the

provisions of Section 15A(b)(5) of the

Act,3 which require that the rules of the

Association provide for the equitable

allocation of reasonable dues, fees, and

other charges in that the proposed rule

reasonably provides for an increase in

the minimum gross income assessment

to help defray the significant increase in

regulatory costs anticipated to be

incurred by NASD Regulation.

(B) Self-Regulatory Organization’s

Statement on Burden on Competition

The 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

The foregoing rule change has become

effective upon filing pursuant to Section

19(b)(3)(A) of the Act 4 and

subparagraph (e) of Rule 19b–4 5

thereunder in that it constitutes a due,

fee or other charge imposed by the

Association. However, the NASD has

determined to implement the rule

change on January 1, 1997.

At any time within 60 days of the

filing of a rule change, the Commission

may summarily abrogate the 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.

Persons making written submissions

should file six copies thereof with the

Secretary, Securities and Exchange

Commission, 450 Fifth Street, N.W.,

Washington, D.C. 20549. 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 will also be

available for inspection and copying at

the principle office of the NASD. All

submissions should refer to File No.

SR–NASD–96–56 and should be

submitted by January 27, 1997.

For the Commission by the Division of

Market Regulation, pursuant to delegated

authority.6

Margaret H. McFarland,

Deputy Secretary.

[FR Doc. 97–860 Filed 1–13–97; 8:45 am]

BILLING CODE 8010–01–M

[Release No. 34–38133; File No. SR–NASD–

96–57]

Self-Regulatory Organizations; Notice

of Filing and Immediate Effectiveness

of Proposed Rule Change by the

National Association of Securities

Dealers, Inc. Relating to SEC

Transaction Fees

January 7, 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 January 2, 1997,

the National Association of Securities

Dealers, Inc. (‘‘NASD’’) filed with the

Securities and Exchange Commission

(‘‘Commission’’ or ‘‘SEC’’) the proposed

rule change as described in Items I,

II,and III below, which Items have been

prepared by the NASD.1 The NASD has

designated this proposal as one

constituting a change to a due, fee, or