NASD Notice to Members 97-26 - May 1997

NASD Regulation Files Amendment to Bank Broker/Dealer Rule With the SEC

Executive Summary

On March 24, 1997, NASD Regulation, Inc. (NASD RegulationSM) filed with the Securities and Exchange Commission (SEC) for its approval Amendment No. 4 to proposed NASD Rule 2350, which specifies requirements applicable to broker/dealers operating on the premises of financial institutions (bank broker/dealer Rule). Amendment No. 4 responds to public comments received by the SEC on the original proposed bank broker/dealer Rule filed with the SEC in December 1995. Among other things, NASD Regulation is proposing to: (1) delete the provision restricting the use of confidential financial information; (2) delete the provision governing compensation of unregistered persons; and (3) revise the provisions regarding setting and communications with the public. NASD Regulation is separately soliciting public comment on proposed rules relating to the use and release of confidential financial information and compensation of unregistered persons that would apply to all members. The SEC has published Amendment No. 4 to the proposed bank broker/dealer Rule in the Federal Register for comment. (see endnote 1) The revised Rule will not become effective until approved by the SEC.