[Federal Register Volume 60, Number 30 (Tuesday, February 14, 1995)]
[Notices]
[Page 8436]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-3570]



[[Page 8436]]

SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-35340; File No. SR-NASD-94-77]


Self-Regulatory Organizations; Order Approving Proposed Rule 
Change by National Association of Securities Dealers, Inc. Relating to 
Granting the Director of Arbitration the Authority to Delegate Duties 
Under the Code of Arbitration Procedure

February 8, 1995.
    On December 20, 1994, the National Association of Securities 
Dealers, Inc. (``NASD'' or ``Association'') filed with the Securities 
and Exchange Commission (``SEC '' or ``Commission'') a proposed rule 
change pursuant to Section 19(b)(1) of the Securities Exchange Act of 
1934 (``Act''),\1\ and Rule 19b-4 thereunder.\2\ The proposed rule 
change amends Section 3 of the Code of Arbitration Procedure 
(``Code'')\3\ to expressly provide that the Director of Arbitration 
(``Director'') may delegate decisionmaking authority as appropriate.

    \1\15 U.S.C. Section 78s(b)(1).
    \2\17 CFR 240.19b-4.
    \3\NASD Manual, Code of Arbitration Procedure, Part I, Sec. 3 
(CCH) 3703.
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    Notice of the proposed rule change, together with the substance of 
the proposal, was provided by issuance of a Commission release 
(Securities Exchange Act Release No. 35168, December 29, 1994) and by 
publication in the Federal Register (60 FR 1822, January 5, 1995). No 
comment letters were received. This order approves the proposed rule 
change.
    The current provisions of Section 3 of the Code provide for the 
NASD Board of Governors to appoint a Director to perform all 
administrative duties and functions in connection with matters 
submitted for arbitration pursuant to the Code. The Director has found 
it necessary to delegate certain duties and functions of the Director 
to other senior management employees of the NASD's Arbitration 
Department (``Department''), especially as a result of the significant 
growth in the Department's staff and workload. The NASD believes that 
the authority of the Director to manage the functions of the NASD's 
Arbitration Department inherently includes the power to delegate duties 
and functions as appropriate. Nevertheless, the rule change amends 
Section 3 of the Code to expressly permit the Director to delegate 
duties and functions of the Director as appropriate.
    The rule change provides that the Director may delegate duties and 
functions of the Director as appropriate. Further, in the event that 
the Director is incapacitated, resigns, is removed or is permanently or 
indefinitely disabled from the performance of the duties and functions 
of the Director, the rule change permits the NASD President or an NASD 
Executive Vice President to appoint an interim Director to perform the 
functions and responsibilities of the Director.
    The Commission finds that the proposed rule change is consistent 
with the provisions of Section 15A(b)(6) of the Act\4\ because the rule 
change will protect investors and the public interest by avoiding 
uncertainty and possible litigation about the authority of a Department 
staff member to act under the Code by permitting the Director to 
delegate duties and functions vested by the Code with the Director. The 
Commission further believes that by permitting certain other NASD 
officers to appoint an interim Director if circumstances render the 
Director unable to discharge the duties vested with the Director, the 
proposal will help protect investors and is in the public interest.

    \4\15 U.S. C. Section 70o-3.
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    It Is Therefore Ordered, pursuant to Section 19(b)(2) of the Act, 
that file No. SR-NASD-94-77 be, and hereby is, approved.

    For the Commission, by the Division of Market Regulation, 
pursuant to delegated authority, 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 95-3570 Filed 2-13-95; 8:45 am]
BILLING CODE 8010-01-M