Supervisory activities requiring registration as an Equity Trader.


August 14, 2000

 

Mr. Edward Balsmann
Compliance Attorney
Equity Capital Markets
Morgan Keegan & Company, Inc.
Morgan Keegan Tower
Fifty Front Street
Memphis, TN 38103

 

Re: Series 55 Registration Requirement

 

Dear Mr. Balsmann:

 

I am writing in response to your letter dated July 31, 2000. You have asked for confirmation that Employee A, an Equity Capital Markets Director at Morgan Keegan & Company, Inc. ("Morgan Keegan"), need not be registered as an Equity Trader based upon the fact that he is not involved in the direct supervision of Morgan Keegan’s trading activities.

 

Your letter states that Morgan Keegan’s Head Trader, Employee B, is registered under both the Series 24 and Series 55, and that she directly supervises all of the traders at Morgan Keegan. In addition, your letter states that Employee A "is positioned above [Employee B] in the firm’s organizational chart," but he has no supervisory role in Morgan Keegan’s trading activities.

 

The staff of the Office of General Counsel, NASD Regulation (the "Staff"), believes that the mere fact that Employee B reports to Employee A will not cause him to be subject to the Equity Trader registration requirements. Although Notice to Members 00-46 includes an illustration describing a supervisor who needs to be Series 55 registered, this example is not meant to suggest that all persons to whom Equity Traders report need to be Series 55 registered. Based on the facts that you have described, it does not appear that the level of participation of Employee A in the operation of the firm’s trading activities is sufficient to trigger the Equity Trader registration requirements.

 

I hope this letter is responsive to your inquiry. Please note that the opinions expressed in this letter are staff opinions only and have not been reviewed or endorsed by the Board of Directors of NASD Regulation. This letter responds only to the issues you have raised based on the facts as you have described them, and does not necessarily address any other rule or interpretation of the NASD or all the possible regulatory and legal issues involved.

 

Very truly yours,

 

 

 

 

Eric J. Moss
Assistant General Counsel

 

cc:

Frank McAuliffe, Vice President
NASD Regulation, Inc., Member Regulation

 

Warren A. Butler, Jr., Vice President
NASD Regulation, Inc., District 5