NASD Notice to Members 03-26 - May 2003

SEC Approves Amendment to Rule 2260 to Expand the Definition of "Designated Investment Adviser"

Executive Summary

Rule 2260 requires member firms to forward proxy material, annual reports, information statements, and other material sent to security holders, the beneficial owner, or the beneficial owner's designated investment adviser. The current definition of "designated investment adviser" in Rule 2260 is limited to certain persons registered under the Investment Advisers Act of 1940 (Advisers Act); however, on March 3, 2003, the Securities and Exchange Commission (SEC) approved SR-NASD-2002-124 to expand the definition of designated investment adviser in Rule 2260 to include state-registered investment advisers. Accordingly, Rule 2260, as amended, will permit beneficial owners to designate state-registered investment advisers, in addition to persons registered under the Advisers Act, to receive proxy and other materials consistent with Rule 2260.

 

Questions concerning this Notice may be directed to Kosha K. Dalal, Assistant General Counsel, Office of General Counsel, Regulatory Policy and Oversight, NASD, at (202) 728-6903.