Special NASD Notice to Members 03-65 - October 2003

NASD Revises NASD Sanction Guidelines

Executive Summary

The NASD Sanction Guidelines (Guidelines) are used by the various bodies that adjudicate disciplinary matters (Adjudicators) in determining appropriately remedial sanctions. NASD staff and respondents also may use these Guidelines in crafting settlements. The Guidelines were initially published in 1993 and have been periodically revised to promote consistency and uniformity in the imposition of sanctions in disciplinary matters. The Guidelines contain an introductory section that explains the purpose of NASD disciplinary sanctions and sets forth certain generally applicable principles and considerations for determining appropriately remedial sanctions. The Guidelines also specify the range of monetary and non-monetary sanctions generally used for particular violations.

 

This Notice advises NASD members and Adjudicators of modifications to: (1) General Principles Applicable To All Sanction Determinations regarding the concept of progressive discipline (General Principle No. 2); (2) the Outside Business Activities - Failure to Comply With Rule Requirements Guideline; and (3) the Selling Away (Private Securities Transactions) Guideline. These Guidelines and General Principle No. 2, as modified, supersede the Outside Business Activities - Failure to Comply With Rule Requirements and Selling Away (Private Securities Transactions) Guidelines and General Principle No. 2 previously published by NASD and referenced in prior Notices to Members. The changes are effective as of December 1, 2003, and apply to all actions as of that date, including pending disciplinary cases.

 

Questions concerning this Notice may be directed to the Office of General Counsel, Regulatory Policy and Oversight, at (202) 728-8071.