Registration requirements of a member if a registered principal begins consulting relationship with the member as a compliance officer.


February 19, 1997

 

RE: Request to Serve as Compliance Officer as Consultant to Firm

 

John Ramsay, Deputy General Counsel of NASD Regulation, Inc., asked me to respond to your January 15, 1997 letter to him. In your letter and our subsequent telephone conversations, you have stated that you are one of two registered principals for [Broker/dealer]. In the past, [Broker/dealer] has sponsored or participated in limited partnership offerings, but the firm has been inactive for several years. You have stated that you will no longer be an employee of the firm as of March 1, 1997, but want to be associated with the firm as an independent contractor. In your capacity as an independent contractor, you would like to continue to serve as compliance officer and executive representative for [Broker/dealer]. You would be available as needed to complete form filing, participate in audits, handle any and all other compliance matters on a timely basis, and regularly come into the office to review NASD publications and correspondence.

 

Based on the facts as you have presented them, you may continue to serve as compliance officer and executive representative if you maintain your registration as a principal with [Broker/dealer]. Both you and the firm would remain fully obligated to comply with the Rules of the Association.

 

If you do not wish to maintain your registration, the remaining principal in the firm must be designated as the compliance officer and executive representative. In addition, the firm should submit a request to the District Office seeking as exemption from the two principal requirement under Rule 1021(e). Although you could provide advice to the firm as an unregistered independent contractor, the firm would remain fully responsible for compliance with the Rules of the Association. To obtain a form to change the designation of the firm's executive representative, you may call the Secretary of the NASD at (202) 728-8000.

 

If you have any questions regarding this letter, please call me at (202) 728-8252. If any of the facts set forth in this letter change, you should contact this office for further guidance.

 

Very truly yours,

 

 

 

Mary M. Dunbar
Senior Attorney