NASD Notice to Members 02-73 - November 2002

SEC Approves New Rules and Rule Amendments Concerning Security Futures; Effective Date: October 15, 2002

Exeuctive Summary

On October 15, 2002, the Securities and Exchange Commission (SEC) approved rule changes by NASD that both create and amend certain rules and interpretive materials to address the requirements for NASD members engaging in a security futures business.

 

This Notice also explains that adding a security futures business may constitute a material change of business and describes the factors a member should consider in determining whether engaging in a security futures business constitutes a material change that would require the member to file a continuing membership application with NASD and obtain prior approval before engaging in a security futures business. The Notice also clarifies that best execution obligations apply to transactions in security futures. In addition, the Notice explains that members engaged in a security futures business must comply with their obligations in the analyst rule, Rule 2711 ("Research Analysts and Research Reports").

 

Questions concerning this Notice may be directed to the Office of General Counsel, NASD Regulatory Policy and Oversight: Gary L. Goldsholle, Associate General Counsel, (202) 728-8104; Alan Lawhead, Associate General Counsel, (202) 728-8853; or Patricia Albrecht, Assistant General Counsel, (202) 728-8026.