Special NASD Notice to Members 02-64 - September 2002

NASD Advises Members that Participation in Tying Arrangements that Violate Federal Statutes Also Violate Just and Equitable Principles of Trade; Requests Information Concerning Such Practices; Comment Period Expires October 21, 2002

Executive Summary

NASD is concerned that the practice of tying commercial credit to investment banking is becoming increasingly widespread. For example, a recent survey of 3,500 corporate financial officers by the Association of Financial Professionals found that 48% believed that "if they did not award other business to short-term lenders, the amount of short-term credit provided would be reduced" and 39% would expect no credit to be offered if they did not award other business to lenders.

 

Questions concerning this Notice to Members may be directed to Joseph E. Price, Director, Corporate Financing Department, at (240) 386-4623.