RCA - Summer 2001 - Ask the Analyst - Seminars

Q: How does the NASD view seminars? Are they considered advertisements or sales literature?


A: Seminar scripts, handouts, slides, or other visual presentations are deemed to be sales literature under NASD Conduct Rule 2210(a)(2).1 As such, these items must comply with the approval, recordkeeping, and filing requirements of the rule in addition to the content standards. In contrast, extemporaneous seminar presentations, such as unscripted question and answer sessions, are considered to be the participation in a public forum. As such, the individual making the presentation must adhere to the content standards of NASD Conduct Rule 2210 only. However, member firms are obligated to supervise all seminar activities of their registered persons in accordance with NASD Conduct Rule 3010. Such supervision may include a prior approval requirement and monitoring of the substance of the seminar.


Q: Does the NASD prohibit projections from third parties about general economic conditions?


A: Members may include reasonable forecasts of general economic conditions in their communications with the public, provided they are clearly labeled as such and provided that sufficient information is included enabling the reader to understand and evaluate the forecast. For example, the communication would have to disclose the material assumptions used in arriving at a forecast and disclose the inherent uncertainty of such projections. Members must bear in mind that the rules strictly prohibit projections of investment results (see NASD Conduct Rule 2210(d)(2)(N)).