NASD Rule 1060 exempts from NASD registration requirements individuals registered as floor members with a national securities exchange whose investment banking or securities functions are related solely and exclusively to effecting transactions on the floor of a national securities exchange. Staff interprets "floor members" for purposes of the rule to include individuals working on the floor of the NYSE and registered with the NYSE as sales assistants.


December 11, 2000

 

Mr. Brian C. Sullivan
Director of Compliance
LaBranche & Co.
One Exchange Plaza
New York, NY 10006-3008

 

Dear Mr. Sullivan:

 

I am writing in response to our phone conversations on September 18 and 26 and November 29, 2000, and your letter dated September 27, 2000. Your firm, LaBranche & Co., is an NASD and NYSE member firm. You have asked for guidance as to whether LaBranche is required to register with the NASD the firm's employees who work solely and exclusively on the floor of the NYSE and are registered with the NYSE. You have represented that some of these employees are registered as floor members and others as trading assistants.

 

Generally, NASD member firms need to register with the NASD all associated persons who engage in the investment banking or securities business. However, NASD Rule 1060 exempts from NASD registration requirements individuals whose investment banking or securities functions are related solely and exclusively to effecting transactions on the floor of a national securities exchange and who are registered as floor members with such exchange.

 

The staff of the Office of General Counsel, NASD Regulation, interprets the term "floor members" for purposes of Rule 1060 to include individuals working on the floor of the NYSE and registered with the NYSE as sales assistants. Accordingly, based on the facts that you have described, we believe that LaBranche is not required to register the employees in question with the NASD. However, if these employees perform any securities or investment banking activities off of the floor of a national securities exchange, they will need to register with the NASD.

 

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:

David A. Leibowitz
Sr. Vice President and Director
NASD Regulation, Inc., District 10