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91-71 Subject: Broker/Dealer and Agent Renewals for 1991-92

SUGGESTED ROUTING:*

Senior Management
Legal & Compliance
Operations
Registration
*These are suggested departments only. Others may be appropriate for your firm.

EXECUTIVE SUMMARY

The 1991-92 NASD broker/dealer and agent registration renewal cycle begins in early November. This program simplifies the renewal process through the payment of one invoice amount that will include fees for NASD personnel assessments, NASD branch-office fees, New York Stock Exchange, American Stock Exchange, and Chicago Board Options Exchange maintenance fees, state agent renewal fees, and state broker/dealer renewal fees. Members should read this notice and the instruction materials included in the invoice package to ensure continued eligibility to do business in the states effective January 1, 1992.

INITIAL RENEWAL INVOICES

On or around November 12, 1991, initial renewal invoices were mailed to all member firms. The invoices included fees for NASD personnel assessments, NASD branch-office fees, New York Stock Exchange (NYSE), American Stock Exchange (Amex), and Chicago Board Options Exchange (CBOE) maintenance fees, state agent renewal fees, and state broker/dealer renewal fees. The NASD must receive full payment of the November invoice no later than December 18, 1991.

NASD personnel assessments for 1992 will be based on the number of registered persons with an approved NASD license as of December 31, 1991. That personnel assessment is $10 per person. NASD branch-office assessments will be based on the number of active branches as of December 31, 1991. This branch-office assessment is $50 per branch.

Agent renewal fees for NYSE, Amex, CBOE, and state affiliations are listed in a table enclosed with each invoice. The table includes a list of broker/dealer renewal fees for states that are participating in this year's broker/dealer renewal program. NYSE, Amex, and CBOE maintenance fees — collected by the NASD for firms that are registered with NYSE/Amex/CBOE as well as the NASD — are based on the number of NYSE-, Amex-, and/or CBOE-registered personnel employed by the member.

If a state is not participating in this year's broker/dealer renewal program, members registered in that state must contact the state directly to assure compliance with renewal requirements. In addition, some participating states may require steps beyond the payment of renewal fees to complete the broker/dealer renewal process. Members should contact states directly for further information on state renewal requirements.

Payment of the initial invoice should be in the form of a check made payable to the National Association of Securities Dealers, Inc. The check should be drawn on the member firm's account, with the firm Central Registration Depository (CRD) number included on the check. Submit the check along with the top portion of the invoice and mail them in the return envelope provided with the invoice. To ensure prompt processing, the renewal invoice payment should not be included with other forms or fee submissions. Members should be aware that failure to return payment to the NASD by the December 18, 1991 deadline will mean a loss of eligibility to do business in the states effective January 1, 1992.

FILING FORM U-5

Members may wish to avoid unwanted renewals by filing Form U-5 for agent terminations in one or more jurisdiction affiliations. Because of the increased convenience and flexibility reported by members that used predated Form U-5 for renewals in previous years, the NASD will again process predated agent terminations this year. From November 1 to December 18, the NASD will accept and process Forms U-5 (both partial and full terminations) with predated dates of termination. Under this procedure, if the U-5 indicates a termination date of December 31, 1991, an agent may continue doing business in a jurisdiction until the end of the calendar year without being assessed renewal fees for that jurisdiction. Please ensure that Forms U-5 are filed by the renewal deadline date of December 18, 1991. Also, predated U-5s cannot be processed if the date of termination indicated is January 1, 1992 or thereafter.

Members should exercise care when submitting predated Forms U-5. The NASD will process these forms as they are received but cannot withdraw a predated termination once processed. To withdraw a predated termination, a member would have to file a new Form U-4 after the termination date.

The NASD encourages members having access to the Firm Access Query System (FAQS) to utilize electronic filings for the submission of all Forms U-5 and page Is of Form U-4. FAQS offers several advantages to firms in this regard, including the ability to immediately process terminations, ensure in-house control over agent registrations, and reduce normal and express mailing costs as well as long-distance telephone calls. It also allows members to quickly and efficiently handle the large filing volumes that typically occur at this time every year. Because of that, the NASD will provide an additional service to FAQS users by expanding the on-line user hours for November and December 1991. The system will be operational from 7 a.m. to 11 p.m., Eastern Time (ET) Mondays through Fridays and also will be available on Saturdays from 8 a.m. to 6 p.m., ET during those months.

FILING FORMS BDW

The CRD Phase II program, now in its third year, allows firms requesting terminations (either full or state only) to file their Forms BDW with the CRD to avoid the assessment of renewal fees in those jurisdictions that are designated on the Form BDW, provided that the jurisdiction is a CRD Phase II participant. Currently, there are six jurisdictions that are not participating in Phase II. They are:

Michigan
New Jersey
Puerto Rico
American Stock Exchange
Chicago Board Options Exchange
New York Stock Exchange

Firms requesting termination in any of the above-listed jurisdictions must submit a Form BDW directly to the jurisdiction.

The deadline for receipt of Forms BDW by the CRD for firms desiring to terminate an affiliation before year-end 1991 is December 18, 1991. This same date applies to the filing of Forms BDW with the jurisdictions that are not participating in Phase II. Predated Forms BDW filed with the CRD will be accepted and processed in the same manner as predated Forms U-5.

REMOVING OPEN REGISTRATIONS

For the fifth year, the NASD will include in the initial invoice package a roster of firm agents whose NASD registration is either terminated or purged because of the existence of a deficient condition for more than 180 days but who have approved registrations with states. This roster should aid in the reconciliation of personnel registrations prior to year's end. Firms may terminate obsolete state registrations through the submission of a Form U-5 or reinstate NASD licenses through the filing of a page 1 of Form U-4. No roster will be included if a firm does not have agents within this category.

BILLING CODE BREAKDOWN

This year's final invoice package will again include a breakdown of fees assessed by billing code for firms that use billing codes in the registration process. This breakdown will aid firms in their internal research and allocation of fees.

FINAL ADJUSTED INVOICES

On or about January 13, 1992, the NASD will mail final adjusted invoices to members. These invoices will reflect the final status of firm and agent registrations as of December 31, 1991. Any adjustments in fees owed as a result of registration terminations or approvals subsequent to the initial invoice mailing will be made in this final reconciled invoice. If a member has more agents registered at year's end than it did on the November invoice date, additional fees will be assessed. If a member has fewer registered personnel at year's end than it did in November, a credit will be issued.

Included with this adjusted invoice will be the member renewal rosters, which will list all renewed personnel registered with the NASD, NYSE, Amex, and each state. Persons whose registration is approved in any of these jurisdictions during November and December will automatically be included in this roster, while registrations that are pending approval or are deficient at year's end will not be included in the renewal process. Firms also will receive an NASD branch-office roster that lists all branches for which they have been assessed.

Firms then will have a two-month period in which to reconcile any discrepancies on the rosters. All jurisdictions should be contacted directly in writing. Specific information and instructions concerning the final adjusted invoice package will appear in the January 1992 issue of the Notices to Members, as well as on the inside cover of the renewal roster.

Questions concerning this notice may be directed to NASD Information Services at (301) 590-6500.


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