NASD Notice to Members 03-62 - October 2003

SEC Approves NASD Rule Proposal To Govern Lending Between Registered Persons and Customers; Effective date: November 10, 2003

Executive Summary

On August 29, 2003, the Securities and Exchange Commission (SEC) approved the adoption of NASD Rule 2370, which prohibits registered persons from borrowing money from or lending money to a customer unless (1) the member has written procedures allowing such lending arrangements consistent with the rule; (2) the loan falls within one of five prescribed permissible types of lending arrangements; and (3) the member pre-approves the loan in writing.1 The text of Rule 2370 is provided in Attachment A and is effective on November 10, 2003.

 

Questions concerning this Notice may be directed to Shirley H. Weiss, Associate General Counsel, Office of General Counsel, Regulatory Policy and Oversight, at (202) 728-8844.