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5 A B C D E F G H I L M N O P Q R S T V
Exemptive Letter

The staff granted an exemption from NASD Rule 2790 in connection with new issue offering of a registered securities exchange for certain allocations as part of its issuer-directed share program.

December 3, 2004

Dana G. Fleischman, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, NY 10006-1470

Re:  Request for Exemption from Rule 2790

Dear Ms. Fleischman:

December 03, 2004
Interpretive Letter

NASD Rule 2210 - Communications with the Public

The posting to a Web site of performance information as required by California state law does not constitute an advertisement under NASD Rule 2210.
November 29, 2004
Report / Study

NASD formed the Mutual Fund Task Force (“Task Force”) in May 2004 to consider ways to improve the transparency of mutual fund portfolio transaction costs and distribution arrangements. The Task Force was established after discussions between the Securities and Exchange Commission (“SEC”) and NASD staffs, to provide guidance to the SEC as it considers the issues raised in a concept release concerning mutual fund portfolio transaction costs and a rule proposal relating to mutual fund distribution arrangements.

November 11, 2004
Interpretive Letter

NASD Rule 2110 - Standards of Commercial Honor and Principles of Trade

Member whose firm will cease to exist upon merger with an acquiring member that does not generally offer retail brokerage services may use negative response letters to accomplish the bulk transfer of its retail accounts to a broker-dealer affiliate of the acquiring member.
November 10, 2004
Interpretive Letter
The use of negative response letters to change the broker-dealer of record on a mutual fund or variable insurance product account held directly at the issuer.
November 08, 2004
Exemptive Letter
An exemption is granted based on the following considerations. First, you have represented that Name, prior to being hired by the Firm, was not engaged in the solicitation of municipal securities business, as defined in the Rule. Second, you have represented that the Firm has a long relationship as an underwriter of municipal securities for the State and State agencies, and neither the hiring of Name nor his Contribution was necessary to obtain municipal securities business from such issuers. Third, the Firm has agreed to institute preventive information barriers to help avoid the potential for conflicting interests to exist and be used, or appear to be used, by the Firm or Name to obtain municipal securities business or compensation or other financial benefits related to such business.
October 27, 2004
Interpretive Letter
Negative response letters may be used to change the broker-dealer of record for customers' "direct application" mutual fund and variable annuity accounts in situations involving the acquisition or merger of a member firm, where the acquiring or surviving entity is the legal successor-in-interest to the member firm.
October 20, 2004
Report / Study

In March 2004, NASD convened a panel of industry experts and investor advocates to assess the challenges facing the corporate debt market and make recommendations for possible improvements. The objective of the Corporate Debt Market Panel was to review and make recommendations to the NASD Board of Governors regarding how to best ensure market integrity and investor protection in the corporate bond market.

September 30, 2004
Interpretive Letter
Member may not present related performance information to "qualified institutional buyers" who are potential investors in 3(c)(1) funds.
September 14, 2004
Exemptive Letter
This request for exemptive relief is granted based on the Firms’ representation that the Contribution was made by an employee who does not and has never engaged in the solicitation of municipal securities business, the imposition of certain “information restrictions” and other Firm-wide compliance measures, a Firm- imposed “censure” and compensation restrictions, and the return of the Contribution.
August 23, 2004
Interpretive Letter
Joint NASD and NYSE interpretation that individuals involved in the development of certain quantitative equity research ratings model are not “research analysts” as defined by the SRO research analyst conflict of interest rules.
August 20, 2004
Interpretive Letter

NASD staff declines to extend tolling period to meet qualification requirements related to implementation of Title II of the Gramm-Leach-Bliley Act of 1999.

August 05, 2004
Report / Study

Variable annuity and variable life insurance products (collectively, “variable insurance products" or “variable products”) are being marketed and sold to a large number of investors. While variable insurance products may be appropriate investments for some investors, concerns have been raised about the sale of these products. This prompted the staffs of the Securities and Exchange Commission (“SEC” or “Commission”) and NASD (“Staff”) to conduct examinations of broker-dealers that sell variable insurance products. This report summarizes the findings of those examinations. 

June 09, 2004
Exemptive Letter
Exemption from lock-up provisions in Rule 2710(g) for shares to be issued upon the split of common stock that takes place within 180 days of the required filing of the offering with NASD when the pre-split shares were acquired prior to the 180 day timeframe.
June 04, 2004
Interpretive Letter

Based on certain representations and compliance with the requirements of SEC Rule 17a-4(i), third party may provide recordkeeping services to its NASD member clients, such that the member clients would not be required to individually download and separately retain copies of documents required pursuant to Rule 2790(b).

June 01, 2004
Guidance

April 2004

April 01, 2004
Guidance

In an 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 the Department of Member Regulation's routine examinations of firms. While each firm must establish its own compliance programs and supervisory procedures, we felt it may be helpful to share our overall priorities.

April 01, 2004
Interpretive Letter

Use of third parties to aid in compliance with NASD Rule 2790(b).

February 17, 2004
Interpretive Letter
Application of NASD Rule 2330(f) to Proposed Profit Sharing Arrangement.
February 04, 2004
Report / Study

As part of its efforts to combat abusive market timing in mutual funds, the SEC intends to propose a mandatory redemption fee on short-term trades. On November 17, 2003, the SEC requested that NASD convene a working group of industry experts to consider how this initiative may be affected by the use of mutual fund omnibus accounts. This memorandum summarizes the views expressed by members of the Omnibus Account Task Force (Task Force) established by NASD.

January 30, 2004
Guidance
Request for Exemption from the Provisions of NASD Conduct Rule 2710
January 15, 2004
Interpretive Letter
Guidance regarding use of related performance information in sales material for private equity funds.
December 30, 2003
Interpretive Letter

Rule 2740 would not prohibit an underwriter in a fixed price offering from paying to another broker/dealer that is unable to participate in the underwriting syndicate an advisory fee or a referral fee to the extent that such payment does not directly or indirectly discount the fixed offering price for any purchaser in the offering.

November 24, 2003
Exemptive Letter
This request for exemptive relief is granted based on the contributions made being small in amount, in support of personal relationships, the Firm’s representation that the contributor will be restricted in his municipal securities activities and municipal securities compensation, the individual will be subject to a period of heightened supervision, and the return or reasonable attempt at the return of the contributions.
November 11, 2003
Interpretive Letter
Application of Rule 2370 to lending arrangements between registered persons and banks or other financial institutions in the business of lending money.
November 07, 2003