NASD Notice to Members 97-81 - November 1997

NASD Regulation Requests Comment on Proposed Amendments Relating to Compensation for Sale Oo Public Offerings of Direct Participation Programs; Comment Period Expires January 9, 1998

Executive Summary

In the following document, NASD Regulation, Inc. (NASD RegulationSM) requests comment on proposed amendments to National Association of Securities Dealers, Inc. (NASD®) Rule 2810 that would modify the compensation that members are permitted to receive in connection with the sale of public offerings of direct participation program (DPP) securities.  The proposed amendments would: (1) lower the front-end maximum permissible compensation from 10 percent to 8 percent; (2) permit a member to receive an annual investor service fee of .20 percent, with maximum front-end compensation of 7.5 percent; (3) permit a member to receive a “trail commission,” in addition to the service fee, for each one percentage point give-up from front-end compensation of 7.5 percent; and (4) lower the maximum organization and offering expense guideline for large offerings.

 

Questions concerning this Request For Comment should be directed to Charles L. Bennett, Director, Corporate Financing, NASD Regulation; Suzanne E. Rothwell, Chief Counsel, Corporate Financing, NASD Regulation; or Carl R. Sperapani, Assistant Director, Corporate Financing, NASD Regulation, at (202) 974-2700.