Guidance

Adequate documentation of reasonable efforts to borrow, standing alone, would not constitute a circumstance sufficient to mitigate the inability to deliver securities on settlement date where a member has relied upon an "Easy to Borrow" or "Hard to Borrow" list.

Electronic Batch Approval of New Customer Accounts.

Employee Leasing Arrangement Does Not Violate Rule 2420

Application of Rule 2820 (h) to a non-cash compensation arrangement that excludes variable annuity contracts that are sold in exchange transactions pursuant to Internal Revenue Code Section 1035 or pursuant to a rollover transaction under Internal Revenue Code Section 402.

NASD members must make an affirmative determination for all short sales prior to executing the sale (absent an exemption), including short positions not carried overnight.

Acceptance by member of referral fee payments by non-member mortgage banker is governed by Rule 3030 and other supervision rules.

Application of NASD Rule 2830(l)(5)(D) to sales contests involving sales personnel who perform marketing services.

The expansion of the NASD's sales practice authority over group variable contracts in August 1996 requires that broker/dealers apply NASD rules to all their sales of group variable contracts, including pre-August 1996 variable contracts. Thus, broker/dealers who had not set up record-keeping procedures for pre-August 1996 contracts must now do so.

In an order settling an enforcement action by the Commodity Futures Trading Commission, an undertaking not to apply for registration for period of three years operates as the functional equivalent of an order suspending registration. One who consents to such an undertaking is statutorily disqualified from registration under Article III, Section 4 of the NASD By-Laws.

Fair Labor Standards Act class actions are ineligible for arbitration in the NASD Regulation forum.