NASD Notice to Members 96-03 - January 1996

NASD Files With the SEC Proposed Rule Governing Members Operating on Bank Premises

Executive Summary

On December 28, 1995, the National Association of Securities Dealers, Inc., (NASD) filed with the Securities and Exchange Commission (SEC) for its approval rules governing members conducting business on the premises of a financial institution (proposed rules). The proposed rules focus on issues of investor confusion involving the purchase of uninsured securities products and, among other things, require that a broker/dealer operating on the premises of a financial institution take certain steps with regard to its physical location at the financial institution, customer disclosure procedures, and promotional literature to clearly distinguish the services provided by the broker/dealer from the functions of the financial institution. The SEC will publish the proposed rules in the Federal Register, indicating a time period when members and others may comment. The new rules will not become final until approved by the SEC.

 

Questions concerning this Notice may be Directed to R. Clark Hooper, Vice President, Advertising/Investment Companies Regulation, at (202) 728-8325; or Daniel M. Sibears, Director, Regulatory Policy, at (202) 728-6911.