Document ID: SEC-2005-0446-0001
Agency: sec
Document Type: Notice
Title: Self-regulatory organizations; proposed rule changes: National Association of Securities Dealers, Inc.
Posted Date: 2005-12-27T05:00Z

[Federal Register: December 27, 2005 (Volume 70, Number 247)]
[Notices]
[Page 76480-76482]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27de05-73]

[[Page 76480]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-52981; File No. SR-NASD-2005-133]

Self-Regulatory Organizations; National Association of Securities
Dealers, Inc.; Notice of Filing and Immediate Effectiveness of Proposed
Rule Change Relating to an Increase in Fees for Certain Qualification
Examinations

December 19, 2005.
    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 November 15, 2005, 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.
NASD has designated the proposed rule change as one establishing or
changing a due, fee, or other charge under Section 19(b)(3)(A)(ii) of
the Act \3\ and Rule 19b-4(f)(2) 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.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
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I. Self-Regulatory Organization's Statement of the Terms of the
Substance of the Proposed Rule Change

    NASD is proposing to amend Section 4 of Schedule A to the NASD By-
Laws (``Schedule A'') to increase examination fees that shall be
assessed persons taking certain qualifications examinations as of
January 1, 2006. Below is the text of the proposed rule change.
Proposed new language is in italics; proposed deletions are in
[brackets].
* * * * *
B. SCHEDULE A TO NASD BY-LAWS
* * * * *
C. Section 4--Fees
    (a) and (b) No change.
    (c) The following fees shall be assessed to each individual who
registers to take an examination as described below as of January 1,
200[5]6. These fees are in addition to the registration fee described
in paragraph (b).

Series 4......................  Registered Options                   $80
                                 Principal.
Series 6......................  Investment Company             [$70] $75
                                 Products/Variable
                                 Contracts
                                 Representative.
Series 7......................  General Securities           [$225] $250
                                 Representative.
Series 9......................  General Securities                   $60
                                 Sales Supervisor--
                                 Options Module.
Series 10.....................  General Securities            [$95] $100
                                 Sales Supervisor--
                                 General Module.
Series 11.....................  Assistant                            $60
                                 Representative--Order
                                 Processing.
Series 17.....................  Limited Registered                   $65
                                 Representative.
Series 22.....................  Direct Participation           [$70] $75
                                 Programs
                                 Representative.
Series 23.....................  General Securities                   $75
                                 Principal Sales
                                 Supervisor Module.
Series 24.....................  General Securities             [$85] $95
                                 Principal.
Series 26.....................  Investment Company                   $75
                                 Products/Variable
                                 Contracts Principal.
Series 27.....................  Financial and                  [$85] $95
                                 Operations Principal.
Series 28.....................  Introducing Broker/                  $75
                                 Dealer Financial and
                                 Operations Principal.
Series 37.....................  Canada Module of S7                 $150
                                 (Options Required).
Series 38.....................  Canada Module of S7                 $150
                                 (No Options Required).
Series 39.....................  Direct Participation                 $75
                                 Programs Principal.
Series 42.....................  Registered Options                   $60
                                 Representative.
Series 55.....................  Limited                        [$80] $85
                                 Representative--Equit
                                 y Trader.
Series 62.....................  Corporate Securities           [$70] $75
                                 Limited
                                 Representative.
Series 72.....................  Government Securities          [$80] $85
                                 Representative.
Series 82.....................  Limited                              $75
                                 Representative--Priva
                                 te Securities
                                 Offering.
Series 86.....................  Research Analyst--                  $150
                                 Analysis.
Series 87.....................  Research Analyst--                  $105
                                 Regulatory.

    (1) through (3) No change.
    (d) through (h) 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
    This proposed rule change amends Schedule A to increase examination
fees that shall be assessed persons taking certain qualification
examinations as of January 1, 2006. Any person associated with a member
firm who is engaged in the securities business of the firm must
register with the NASD. As part of the registration process, securities
professionals must pass a qualification examination to demonstrate
competence in each area in which they intend to work.
    Some of these examinations are sponsored (i.e., developed) by NASD,
and others are sponsored by the New York Stock Exchange, Inc.
(``NYSE''), the Municipal Securities Rulemaking Board (``MSRB''), or
other self-regulatory organizations (``SROs'').\5\ NASD administers
qualification examinations via computer through the PROCTOR[supreg]
system \6\ at test centers operated by vendors under contract with
NASD. NASD charges an examination fee to candidates for NASD-sponsored
examinations. For

[[Page 76481]]

those examinations sponsored by a NASD client and administered/
delivered by NASD, NASD charges a delivery fee that comprises either a
part or all of the examination fee for these examinations.\7\
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    \5\ For example, NASD administers and delivers the Series 6, 24,
and 27 examinations, which are sponsored by NASD. NASD also
administers and delivers client examinations, such as the Series 7,
which is sponsored by the NYSE, and the Series 10, which is
sponsored jointly by several SROs (the American Stock Exchange LLC
(``Amex''), the Chicago Board Options Exchange, Inc. (``CBOE''),
MSRB, NASD, NYSE, the Pacific Exchange, Inc. (``PCX''), and the
Philadelphia Stock Exchange, Inc. (``Phlx'')).
    \6\ PROCTOR[supreg] is a technology system that supports
computer-based testing and training.
    \7\ For additional discussion of the examination and delivery
fee structure, see Securities Exchange Act Release No. 50575
(October 20, 2004), 69 FR 62732 (October 27, 2004) (Notice of Filing
and Immediate Effectiveness of Proposed Rule Change and Amendment
No. 1 Thereto Relating to Amendments to Section 4 of Schedule A to
the NASD By-Laws (Fees for Qualification Examinations)) (SR-NASD-
2004-145).
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    Each year, NASD conducts a comprehensive review of the licensing
examination fee structure, which includes an analysis of the costs of
developing, administering, and delivering examinations. NASD's review
in 2005 showed that certain operational costs are rising. In
particular, these costs consist of (1) the cost of providing the
extensive network of test delivery centers; and (2) technology costs
required to maintain the current PROCTOR[supreg] system and to redesign
the PROCTOR[supreg] system. The proposed rule change will increase
examination fees for certain NASD-sponsored examinations. In addition,
NASD has advised its client examination sponsors of the impact of the
higher costs on delivery fees for client-sponsored examinations.
Accordingly, NASD is proposing to amend Schedule A to reflect the
following increases in examination fees (which includes NASD-sponsored
and client-sponsored examinations, as well as joint SRO examinations):

Series 6................................  Investment Company Products/      From $70 to $75.
                                           Variable Contracts
                                           Representative (NASD-sponsored).
Series 7................................  General Securities                From $225 to $250.
                                           Representative (NYSE-sponsored).
Series 10...............................  General Securities Sales          From $95 to $100.
                                           Supervisor--General Module
                                           (Sponsored jointly by AMEX,
                                           CBOE, NASD, NYSE, PCX, and
                                           PHLX).
Series 22...............................  Direct Participation Programs     From $70 to $75.
                                           Representative (NASD-sponsored).
Series 24...............................  General Securities Principal      From $85 to $95.
                                           (NASD-sponsored).
Series 27...............................  Financial and Operations          From $85 to $95.
                                           Principal (NASD-sponsored).
Series 55...............................  Limited Representative--Equity    From $80 to $85.
                                           Trader (NASD-sponsored).
Series 62...............................  Corporate Securities Limited      From $70 to $75.
                                           Representative (NASD-sponsored).
Series 72...............................  Government Securities             From $80 to $85.
                                           Representative (NASD-sponsored).

    The proposed rule change is effective upon filing pursuant to
Section 19(b)(3)(A) of the Act \8\ and paragraph (f)(2) of Rule 19b-4
thereunder,\9\ in that the proposed rule change establishes or changes
a due, fee, or other charge imposed by NASD. The new fees will be
become effective for ``120-day examination windows'' opened in the
Central Registration Depository (CRD[supreg]) on or after January 1,
2006.\10\ NASD will continue to conduct an annual review of its costs
and adjust examination and delivery fees, if necessary, as of January 1
each year after making the appropriate rule filings.
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    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
    \10\ The published fee represents the fee that will be charged
at the time the individual registers for the examination. The
individual then has 120 days to take the examination.
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2. Statutory Basis
    NASD believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(5) of the Act,\11\ which requires, among
other things, that NASD rules provide for the equitable allocation of
reasonable dues, fees and other charges among members and issuers and
other persons using any facility or system that NASD operates or
controls. NASD believes that the rule change is consistent with Section
15A(b)(5) of the Act in that the fee changes reflect NASD's increased
costs in delivering the examinations and in maintaining and upgrading
the examination delivery system.\12\
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    \11\ 15 U.S.C. 78o-3(b)(5).
    \12\ Id.
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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.

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 rule change establishes or changes a due,
fee, or other charge imposed by NASD, it has become effective pursuant
to Section 19(b)(3)(A) of the Act \13\ and Rule 19b-4(f)(2)
thereunder.\14\ 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.
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    \13\ 15 U.S.C. 78s(b)(3)(A).
    \14\ 17 CFR 240.19b-4(f)(2).
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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 (http://www.sec.gov/rules/sro.shtml.
); or     Send an e-mail to rule-comments@sec.gov. Please include

File Number SR-NASD-2005-133 on the subject line.

Paper Comments

     Send paper comments in triplicate to Jonathan G. Katz,
Secretary, Securities and Exchange Commission, 100 F Street, NE.,
Washington, DC 20549-9303.
    All submissions should refer to File Number SR-NASD-2005-133. 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 (http://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

[[Page 76482]]

Room. Copies of such filing also will be available for inspection and
copying at the principal office of the NASD. 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-NASD-2005-133 and should be submitted on
or before January 17, 2006.

    For the Commission, by the Division of Market Regulation,
pursuant to delegated authority.\15\
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    \15\ 17 CFR 200.30-3(a)(12).

Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7840 Filed 12-23-05; 8:45 am]

BILLING CODE 8010-01-P