NASD Notice to Members 04-50 - July 2004

Treatment of Commodity Pool Trail Commissions under Rule 2810 (Direct Participation Programs Rule); Effective Date: October 12, 2004

Executive Summary

NASD Rule 2810 (Direct Participation Programs Rule or DPP Rule) governs public offerings of direct participation programs (DPPs), including establishing limits on the level of underwriting compensation. Historically, in reviewing the level of underwriting compensation in commodity pool DPPs, NASD staff has excluded certain trail commissions. This Notice serves to advise members that effective immediately, NASD staff will consider all trail commissions paid in connection with commodity pool DPPs in calculating whether the level of underwriting compensation meets the requirements of Rule 2810.

 

Questions concerning this Notice may be directed to Joseph E. Price, Vice President and Director, Corporate Financing Department, at (240) 386-4642; or Gary L. Goldsholle, Associate Vice President and Associate General Counsel, Office of General Counsel, Regulatory Policy and Oversight, at (202) 728-8104.