SR-NASD-2002-099

Revisions to By-Laws Regarding Gross Income Assessments and Personnel Assessments

NASD has filed with the SEC a proposed rule change to Schedule A to NASD By-Laws to amend its member regulatory pricing structure. Under the current structure, three types of fees and assessments are used to fund NASD’s member regulatory activities: Regulatory Fee, Personnel Assessment, and Gross Income Assessment (GIA). The proposed restructuring is comprised of four important amendments: 1) eliminate the Regulatory Fee; 2) institute a new transaction-based Trading Activity Fee similar to the SEC’s Section 31 Fee; 3) increase the rates assessed to member firms under the Personnel Assessment; and 4) implement a simplified three-tiered flat rate for the GIA and eliminate current deductions and exclusions. This rule filing is a part of a package of two separate yet related rule filings being submitted to the SEC as a result of a review of the overall NASD pricing structure and is intended to address the last two amendments to NASD pricing restructuring by increasing the rates assessed to member firms under the Personnel Assessment and implementing a simplified three-tiered flat rate for the GIA and eliminating current deductions and exclusions.