Special NASD Notice to Members 03-17 - March 2003

Sales Material for Municipal Fund Securities

Executive Summary

NASD recognizes that the market for municipal fund securities, particularly Section 529 college savings plan securities, continues to evolve rapidly. Many NASD members active in the municipal fund securities market have no other experience effecting municipal securities transactions and therefore may not be familiar with the regulatory treatment of these securities. Further, even when a broker/dealer or municipal securities dealer has a sound understanding derived from its other municipal securities activities relating to traditional debt securities, the unique nature of municipal fund securities may result in these otherwise familiar rules being applied in unfamiliar ways.

 

NASD is committed to providing interpretive guidance regarding the application of our rules to dealers effecting transactions in municipal fund securities as we become aware of issues in which such guidance would be beneficial. Consequently, NASD is issuing this Special Notice to Members to clarify the treatment of sales material for municipal fund securities.

 

Any questions concerning this Special Notice may be directed to Thomas A. Pappas, Associate Vice President, Advertising Regulation, at (240) 386-4500.