Guidance

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Guidance
Improving Examination Results - May 2007
NASD issues this annual publication to assist member firms in their compliance efforts.
May 01, 2007
Exemptive Letter
Louis J. Karcher, Pipeline Trading Systems LLC

Staff grants exemption from the Short Sale Rule for certain transactions executed through a member's passively-priced trading system.

April 03, 2007
Guidance
Notice to All TRF, ADF and Other NASD Facility Participants Regarding AGU and QSR Relationships
The rules governing each NASD Trade Reporting Facility ("TRF") provide that a member may agree to allow a TRF Participant to report and lock-in trades on its behalf, only if both parties have completed an agreement to that effect (a "give up agreement") in the form specified by NASD.
January 25, 2007
Report / Study
NASD Report on Examination Findings Regarding Gifts and Gratuities

As a result of a recent review of gift and gratuity practices of over 40 member firms, NASD staff is concerned that members may not be fulfilling their obligations to comply with, and establish adequate supervisory systems and procedures reasonably designed to achieve compliance with, NASD’s rule governing gifts and gratuities – Conduct Rule 3060 (the “gift rule”).

December 04, 2006
Interpretive Letter
Interpretive Letter to Evan Charkes, Citigroup Global Markets, Inc.

NASD Rule 3010 - Supervision

November 30, 2006
Exemptive Letter
Marianne McKeon, Esq., Dewey Ballantine LLP

The staff granted an exemption from NASD Rule 2790 with respect to purchases of “new issues” by the National Railroad Retirement Investment Trust.

November 09, 2006
Exemptive Letter
Name Not Public
Exemptive relief is granted based on: the representation that the individual did not engage in the solicitation of municipal securities business; for the six years prior to being hired by the Firm; the Contributions were made prior to the individual being employed by the Firm; imposition by the Firm of extensive Firm-wide information barriers on certain municipal securities business communications; prohibition of, for a specified period of time, the individual's solicitation of new municipal securities business; and the commitment to a quarterly certification of compliance.
October 16, 2006
Interpretive Letter
Interpretive Letter to Alan M. Wolper, Esq., Sutherland Asbill & Brennan LLP

NASD Rule 2460 - Payments for Market Making

Services rendered in acting as a Designated Advisor for Disclosure (DAD) for Pink Sheets’ new OTCQX listing may fall within the exception of Rule 2460(b), which permits a member to accept payment for bona fide services; however, this conclusion will depend upon the specific payments made and services that ultimately are rendered.
October 06, 2006
Guidance
Interpretive Letter to Steven K. McGinnis, Loring Ward Securities, Inc.
NASD Rule 2830 - Investment Company SecuritiesOffices of sub-adviser holding training and education meeting is permissible location under Rule 2830(l).
September 28, 2006
Exemptive Letter
Name Not Public
Exemptive relief is granted based on: the representation that the individual did not solicit municipal securities business; the contribution being made prior to his employment at the Firm; the Firm's imposition of Firm-wide information barriers on certain municipal securities business communications: for a specified period, prohibition of the solicitation of new municipal securities business by the individual; and the commitment to a quarterly certification of compliance.
August 30, 2006
Interpretive Letter
NASD Office of General Counsel, Regulatory Policy and Oversight
A Member's Responsibilities Regarding the Outsourcing of Certain Activities
August 15, 2006
Guidance
Memorandum to Address NASD Rules on Secondary Trading in Shares of Exchange-Traded Funds Registered Under the Investment Company Act of 1940
 
August 14, 2006
Interpretive Letter
Interpretive Letter to Eileen Ryan, Esq., Securities Industry Association, and Sarah Starkweather, Esq., The Bond Market Association
NASD Rule 2211 - Institutional Sales Material and CorrespondenceFree writing prospectuses are not subject to Rules 2210 and 2211 or the filing requirements of Rules 2710 and 2720
August 01, 2006
Interpretive Letter
Interpretive Letter to Michael R. Trocchio, Esq., Bingham McCutchen LLP
NASD Rule 2110 - Standards of Commercial Honor and Principles of TradeMember ceasing to offer retail brokerage accounts with investment advisory and prime brokerage services may use negative response letters to accomplish the bulk transfer of its retail brokerage accounts to a newly formed broker-dealer.
June 02, 2006
Exemptive Letter
Name Not Public
Exemptive relief is denied based on: the Firm’s repeated failure to detect Officer A’s contributions in excess of $250; the Firm had actual knowledge of all three of Officer A’s contributions and that the Firm violated the municipal securities ban on two separate ocassions; and the firm failed to discover its own rule violations prior to NASD’s intervention.
May 17, 2006
Report / Study
Report of the Customer Account Transfer Task Force
In response to numerous customer complaints and industry frustration about delays in the transfer of securities accounts from one brokerage firm to another, NASD established the Customer Account Transfer Task Force (Task Force) to consider ways to improve the process of inter-firm customer account transfers. This Report presents the results of the Task Force's deliberations.
May 14, 2006
Guidance
Improving Examination Results - May 2006

May 2006

In a continuing effort to assist member firms' compliance efforts, NASD is issuing this regular communication, "Improving Examination Results." This document has two sections: "Examination Priorities" and "Frequently Found Violations," both of which relate to NASD's routine examinations of firms. While each firm must establish its own compliance programs and supervisory procedures, members have commented that it is very helpful to them when we share our overall priorities.

May 01, 2006
Exemptive Letter
Name Not Public
This request for exemptive relief is granted based on the Firm's representation that the individual did not engage in the solicitation of municipal securities business, as defined by MSRB Rule G-37, the imposition by the Firm of extensive Firm-wide information barriers on certain municipal securities business communications, prohibition of, for a specified period of time, the individual's solicitation of new municipal securities business, a Firm commitment to conduct training or re-training for all Firm MFPs and new hire MFPs, including an on-going annual educational effort, a review of existing Firm procedures and the development of necessary enhancements.
February 23, 2006
Exemptive Letter
Bruce E. Lee, Esq.

The staff granted an exemption from NASD Rule 2790 in connection with new issue offering where all decisions regarding the allocation of shares in the offering are determined at the sole discretion of the issuer.

February 03, 2006
Interpretive Letter
Interpretive Letter to Mr. Alan E. Sorcher, Securities Industry Association & Ms. Sarah A. Miller, ABA Securities Association
NASD reaffirms its policy of exempting members from the requirement to supervise registered bank personnel under Rules 3010, 3030, 3040 and 3050, so long as such persons continue to be supervised by the bank and do not engage in any securities activity for or on behalf of the member firm of which they are registered.
December 12, 2005
Exemptive Letter
Noel M. Gruber, Esq.

The staff granted an exemption from NASD Rule 2790 in connection with new issue offering where all decisions regarding the allocation of shares in the offering are determined at the sole discretion of the issuer, and the involvement of a member in the offering is mandated under state law and limited solely to ministerial functions.

October 18, 2005
 
Noel M. Gruber, Esq.
Kennedy & Baris, L.L.P.
Suite P-15
4701 Sangamore Road
Bethesda, MD 20816

Re:  Request for Exemption from Rule 2790

Dear Mr. Gruber:

October 18, 2005
Exemptive Letter
Name Not Public
This request for exemptive relief is granted based on the representations that the Contributions were made prior to the individual's employment with the Firm, and the individual has never been involved in municipal securities business as defined by MSRB Rule G-37. Additionally, the Firm has agreed to institute information barriers and compensation restrictions, and the contributions have been returned.
October 11, 2005
Exemptive Letter
Name Not Public
This request for exemptive relief is granted based on the Firm's representation that the Contributions were made prior to the individual being employed by the Firm, and that the individual has never engaged in municipal securities business, as defined by MSRB Rule G-37, the return of the Contributions, and the extensive information barriers and compensation restrictions.
October 11, 2005
Exemptive Letter
Name Not Public
This request for exemptive relief is granted based on the Firm's representation that the Contributions were made prior to the individual's employment with the Firm, and that the individual was never engaged in municipal securities business, as defined by MSRB Rule G-37 ("Rule"), and the individual has never solicited municipal securities business from the City or City agencies of whom the Contribution recipients are issuer officials. The Firm agreed to institute certain information barriers, the individual will, for a period of time, be prohibited from soliciting municipal securities business as defined by the Rule, and the individual may not receive any compensation derived directly or indirectly from municipal securities business from City or certain City agencies for a period of time.
September 22, 2005
Exemptive Letter
Name Not Public
This request for exemptive relief is granted based on the Firm's representation that the contributor has never solicited municipal securities business, as defined by MSRB Rule G-37, from the State or entities or agencies connected with the State of whom the contribution recipient is considered to be an issuer official, the Contribution was returned, and representations that the Firm has imposed certain limitations on the individual's municipal business solicitation, and receipt of compensation from the Firm's municipal securities business with the State or State agencies.
September 20, 2005