NASD Notice to Members 01-37 - June 2001

NASD Regulation Extends Deadline for Delivery of Margin Disclosure Statement to Existing Non-Institutional Customers to January 31, 2002

Executive Summary

As described in NASD Notice to Members (NtM) 01-31 (May 2001), on April 26, 2001, the Securities and Exchange Commission (SEC) approved National Association of Securities Dealers, Inc. (NASD®) Rule 2341, which requires all NASD members to deliver to non-institutional customers a specified disclosure statement that discusses the operation of margin accounts and the risks associated with trading on margin (the "rule change"). The rule change requires that members deliver the margin disclosure statement in a separate document to non-institutional customers prior to or at the opening of a margin account. The rule change also requires that the margin disclosure statement or an abbreviated version of the disclosure statement, as specified in the rule, be provided to margin customers on an annual basis, either in a separate document or as part of other account documentation.

 

Questions concerning this Notice may be directed to Stephanie M. Dumont, Associate General Counsel, Office of General Counsel, NASD Regulation, Inc. (NASD Regulation), at (202) 728-8176, or Susan DeMando, Director, Financial Operations, Member Regulation, NASD Regulation, at (202) 728-8411.