NASD Notice to Members 97-14 - March 1997

NASD Files With the SEC Proposed Amendment to Regulate the Disclosure of Values for Illiquid Direct Participation Program and Real Estate Investment Trust Securities on Customer Account Statements

Executive Summary

On February 21, 1997, NASD Regulation, Inc. (NASD Regulation) filed with the Securities and Exchange Commission (SEC) an amendment to NASD Conduct Rule 2340 to regulate the disclosure of values for unlisted and illiquid direct participation program (DPP) and real estate investment trust (REIT) securities on customer account statements. The proposed amendment would, among other things, require that an estimated value for DPP/REIT securities be disclosed under certain circumstances and mandate cautionary disclosures. The SEC will publish the proposed amendment 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.