NASD Notice to Members 01-58 - September 2001

Rules Relating to Bond Mutual Fund Volatility Ratings Extended Two Years

Executive Summary

On August 10, 2001, the effectiveness of the National Association of Securities Dealers, Inc. (NASD®) rules that govern the use of bond mutual fund volatility ratings in member sales material was extended until August 31, 2003. NASD IM- 2210-5 permits members and associated persons to include bond mutual fund volatility ratings in supplemental sales literature, subject to certain conditions. NASD Rule 2210(c)(3) requires supplemental sales literature containing bond mutual fund volatility ratings to be filed with the Advertising Regulation Department (the Department) for review and approval at least 10 days prior to use.

 

The Securities and Exchange Commission (SEC) originally approved IM-2210-5 and 2210(c) (3) on an interim 18-month pilot basis, which period was to expire on August 31, 2001. NASD Regulation, Inc. (NASD RegulationSM) proposed that the pilot period be extended an additional two years, until August 31, 2003. Pursuant to SEC rules, the proposal was effective immediately upon filing.

 

Questions or comments concerning this Notice may be directed to Thomas M. Selman, Senior Vice President, Investment Companies/Corporate Financing, NASD Regulation, at (240) 386-4533; Joseph P. Savage, Counsel, Investment Companies Regulation, NASD Regulation, at (240) 386-4534; or Sarah J. Williams, Assistant General Counsel, NASD Regulation, at (202) 728-8083