NASD Notice to Members 04-84 - November 2004

SEC Approves Adjustments to the Trading Activity Fee

Executive Summary

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) to 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 Rule6210) and all municipal securities subject to Municipal Securities Rulemaking Board (MSRB) reporting requirements.1NASD will implement these changes as follows: (1) the TAF rate reduction and the reduction on the maximum per trade charge on covered equity securities will be effective November 1, 2004; and (2) the TAF will be assessed on “TRACE-eligible securities” that fall within the definition of a “reportable TRACE transaction” (as defined in Rule 6210) and all municipal securities subject to MSRB reporting requirements effective April 1, 2005. NASD is delaying the effective date for debt securities until April 1 to allow member firms sufficient time to make programming changes to reflect the addition of two new categories of covered securities.


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.