NASD Notice to Members 05-23 - March 2005

NASD Issues Further Guidance on the Trading Activity Fee

Executive Summary

On October 1, 2004, the Securities and Exchange Commission (SEC or Commission) approved an NASD rule filing amending the Trading Activity Fee (TAF) that would reduce the TAF rate for covered equity securities, reduce the maximum per trade charge on covered equity securities, and assess the TAF on corporate debt securities that, under the Trade Reporting and Compliance Engine (TRACE) Rules, are defined as "TRACE-eligible securities" that fall within the definition of a "reportable TRACE transaction" (as defined in Rule 6210(c)) and all municipal securities subject to Municipal Securities Rulemaking Board (MSRB) reporting requirements.1 As previously announced in Notice to Members (NTM) 04-84, the TAF will be assessed on "TRACE-eligible securities" that fall within the definition of a "reportable TRACE transaction" (as defined in Rule 6210(c)) and all municipal securities subject to MSRB reporting requirements effective April 1, 2005. In NTM 04-84, NASD also requested that members submit written questions concerning any operational aspects of applying the TAF to debt securities so that member firms could program their systems accordingly. NASD received a limited number of written questions in response to NTM 04-84.

 

Questions concerning this Notice should be directed to NASD Finance at (240) 386-5397; or the Office of General Counsel, Regulatory Policy and Oversight, at (240) 728-8071. 

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