Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”) and Rule 19b-4 thereunder, notice is hereby given that on December 8, 2003, the National Association of Securities Dealers, Inc. (“NASD”), filed with the Securities and Exchange Commission (“Commission”) the proposed rule change as described in items I, II, and III below, which items have been prepared by 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 is proposing to require members to review and, if necessary, update their executive representative (“Representative”) contact information on a quarterly basis. The text of the proposed rule change is below. Proposed new language is in italics.
1000. MEMBERSHIP, REGISTRATION AND QUALIFICATION REQUIREMENTS
1150. Executive Representative
Each member must review and, if necessary, update its executive representative designation and contact information as required by Article IV, Section 3 of the NASD By-Laws within 17 business days after the end of each calendar quarter.
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
Under Article IV, section 3 of the NASD By-Laws, members must appoint and certify to NASD one Representative to represent, vote, and act for the member in all affairs of NASD. The Representative must be a member of senior management and a registered principal of the member. In addition, the Representative is required to maintain an Internet electronic e-mail account for communication with NASD and must update firm contact information.
Given the important role of the Representative in representing, voting, and acting for the member, NASD believes that members should review and update the Representative designation and contact information periodically to ensure its accuracy. Accordingly, the proposed rule change would require that each member conduct a review and, if necessary, update its Representative information on a quarterly basis, specifically within 17 business days after the end of each calendar quarter. NASD is examining different methods of reminding members of their need to review and update their Representative information on a quarterly basis, including the possibility of a Web page linked to the act of filing the FOCUS report that would prompt members to update such designation and contact information and/or through e-mail reminders to the firm.
2. Statutory Basis
NASD believes that the proposed rule change is consistent with the provisions of section 15A(b)(6) of the Act  , which requires, among other things, that NASD's rules be designed to prevent fraudulent and manipulative acts and Start Printed Page 3974practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest. NASD believes that this proposed rule change will ensure that members' Representative contact information is accurate and that NASD can timely contact members.
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, as amended.
C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants or Others
Comments were neither solicited nor received.
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 NASD 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. Comments may also be submitted electronically at the following e-mail address: firstname.lastname@example.org. All comment letters should refer to File No. SR-NASD-2003-184. This file number should be included on the subject line if e-mail is used. To help the Commission process and review comments more efficiently, comments should be sent in hardcopy or by e-mail but not by both methods. 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 principal office of the NASD. All submissions should refer to file number SR-NASD-2003-184 and should be submitted by February 17, 2004.Start Signature
For the Commission, by the Division of Market Regulation, pursuant to delegated authority.
Margaret H. McFarland,
3. The Commission notes that NASD filed the proposed rule change with a typographical error in the proposed rule text. In this instance, because the error was technical in nature, the Commission did not require NASD to file an amendment to the proposed rule change. In the future, the Commission expects that NASD will carefully review proposed rule changes before filing them with the Commission to ensure their accuracy.Back to Citation
[FR Doc. 04-1666 Filed 1-26-04; 8:45 am]
BILLING CODE 8010-01-P