NASD Notice to Members 01-52 - August 2001

SEC Approves NASD Rule Proposal Relating to Registration Requirements for Limited Principals-Financial and Operations and Limited Principals-Introducing Broker/Dealer Financial and Operations; Effective Date: September 17, 2001

Executive Summary

On May 21, 2001, the Securities and Exchange Commission (SEC) approved amendments to National Association of Securities Dealers, Inc. (NASD®) Rule 1022(b), "Limited Principal - Financial and Operations" ("FINOP"), and NASD Rule 1022(c) "Limited Principal - Introducing Broker/Dealer Financial and Operations" ("Introducing FINOP"). Effective September 17, 2001, these changes will require every firm approved for membership in the NASD on or after September 17, 2001, that is also subject to the requirements of the SEC's net capital rule (Exchange Act Rule 15c3-1), to have at least one associated person registered as either a Series 27 FINOP or Series 28 Introducing FINOP, depending upon the firm's net capital requirement. Members that were specifically exempted from the requirement to employ a Series 27 FINOP or Series 28 Introducing FINOP prior to September 17, 2001, will not be subject to these requirements. No firm will be permitted to seek an exemption from this requirement under NASD Rule 9610(a). The amendments to NASD Rules 1022(b) and 1022(c) also clarify their applicability to NASD members by making citations in them consistent with Exchange Act Rule 15c3-1. The changes to Rules 1022(b) and 1022(c) will not affect individuals who currently are grandfathered from the Series 27 or Series 28 examinations because these individuals are considered to possess the license for which they were grandfathered.

 

Questions concerning this Notice may be directed to Susan DeMando, Director, Financial Operations, Member Regulation, NASD Regulation, Inc., at (202) 728- 8411; or Shirley H. Weiss, Associate General Counsel, Office of General Counsel, NASD Regulation, Inc., at (202) 728-8844.