RCA - September 1998 - Ask the Analyst - Electronic Communications & Broker-Dealer Name

Q. I recently used an on-line business directory/search tool and noticed many listings under headings such as "mutual funds" or "securities" that identified only the names of individual registered representatives. Are these listings subject to the same regulatory standards as other advertisements?


A. Yes. If a registered representative publicizes his or her securities business through an on-line business directory or search tool, the NASD Conduct Rules governing advertisements apply. For example, if a representative causes her name, address, and telephone number to be featured under the topic heading "stocks" in an on-line directory, the listing meets the definition of advertisement set forth in NASD Conduct Rule 2210(a)(1). A registered principal of the NASD member firm must approve the placement and content of the listing prior to use and in writing. The listing must clearly and prominently disclose the NASD member firm name (see Rule 2210(d)(2)(A) and (f)(2)(A)). In addition, if the listing names a non-member entity, such as the representative's insurance agency, then the listing must clearly indicate that the NASD member firm offers the securities products or services referenced (see Rule 2210(f)(2)(C)). Finally, the listing must present telephone number and address information for a registered branch office, OSJ or main office of the NASD member firm in accordance with Rule 3010(g)(2).