NASD Notice to Members 97-27 - May 1997

Application of NASD Conduct Rules to Group Variable Contracts and Other Exempted Securities

Executive Summary

On August 20, 1996, the Securities and Exchange Commission (SEC) approved amendments to the NASD Conduct Rules (Conduct Rules) giving NASD Regulation, Inc. (NASD RegulationSM) expanded sales-practice authority over exempted securities.  This Notice clarifies that this expanded sales-practice authority permits NASD Regulation to apply the Conduct Rules to members and their registered representatives who sell or distribute group variable contracts and other securities exempted under the Securities Exchange Act of 1934 (Exchange Act), other than municipal securities, and that such securities are now subject to the Conduct Rules.