RCA - Winter 1999 - Ask the Analyst - Bank Broker-Dealers

Q. Does the requirement in NASD Conduct Rule 2350 to disclose "Not FDIC Insured, No Bank Guarantee, May Lose Value" apply to letterhead, envelopes, and business cards?


A. The Rule requires this disclosure in NASD member firms’ advertisements and sales literature that announce the location of a financial institution where broker/dealer services are provided or that are distributed by member firms on the premises of financial institutions. The Rule exempts certain communications, such as electronic signs or radio broadcasts of 30 seconds or less, where the omission of these disclosures would not cause the advertisement or sales literature to be misleading in light of the context in which it is presented. The NASD Regulation staff has extended this exception to letterhead, envelopes, and business cards that do not reference investments or securities products. However, if a letter references investments or securities products, then it would have to include the disclosures mandated by NASD Rule 2350.