RCA - September 1998 - Ask the Analyst - Electronic Communications & Approval and Recordkeeping  

Q. NASD Conduct Rule 2210(b)(1) requires that a registered principal approve each advertisement or item of sales literature prior to use or filing with the Department by signature or initial. May a registered principal approve a group electronic mail message, or other electronic communication, via a secured, electronic signature system such as the one described in the "Staff interpretation on the use of electronic signatures under NASD Rules 3110(c)(1) and 3010(d)" published on the NASD Regulation Web Site?


A. Yes. A firm may use a secured, electronic signature system as described in the interpretive letter for registered principal approval of electronic communications as required by Rule 2210(b)(1). The letter describes an electronic workflow process using optical disc technology to permit authorized principals to review and approve new account forms. The letter requires the implementation of certain safeguards including access of records by NASD staff, the ability to download and print documents, security precautions, written supervisory procedures, and periodic review of the system for compliance with NASD and SEC rules. Please see the interpretive letter for details.