NASD Notice to Members 06-08 - February 2006

Amendments Relating to the Status of Persons Serving in the Armed Forces of the United States; Effective Dates: IM-1000-2(a) and IM-1000-2(b): November 15, 2005; IM-1000-2(c): March 27, 2006

Executive Summary

On November 15, 2005, NASD filed with the Securities and Exchange Commission (SEC) for immediate effectiveness amendments to Interpretive Material (IM) 1000-2 to (1) clarify that the scope of the relief provided in the IM extends to any registered person of a firm who volunteers for or is called into active military duty, not just registered representatives; (2) codify the staff's existing interpretation with respect to the receipt of transaction-related compensation by registered persons who volunteer for or are called into active military duty; (3) clarify that the relief provided to a registered person of a firm who volunteers for or is called into active military duty is available to the person during the period that such person remains registered with the firm, regardless of whether the person returns to employment at a different firm upon completion of his or her active military duty; and (4) clarify that the "inactive" status designation is available to registered persons and sole proprietors who volunteer for or are called into active duty in the Armed Forces of the United States and is available to them only while they remain on active military duty.1 As part of these amendments, NASD also labeled and numbered the existing rule text. These amendments became effective on November 15, 2005.

 

Additionally, on January 26, 2006, the SEC approved amendments toIM-1000-2 to toll the two-year expiration provisions for qualification examination requirements set forth in Rules 1021(c), 1031(c), and1041(c) for certain former registered persons serving in the Armed Forces of the United States, including persons who commence their active military duty within two years after they have ceased to be registered with a member and persons who terminate their registration with a member while on active military duty.2 These amendments become effective on March 27, 2006.

 

Questions concerning this Notice may be directed to Afshin Atabaki, Assistant General Counsel, Office of General Counsel, Regulatory Policy and Oversight, at (202) 728-8902.

 

1 See Securities Exchange Act Release No. 52980 (December 19, 2005), 70 FR 76477 (December27, 2005) (Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to the Status of Registered Persons and Sole Proprietors Serving in the Armed Forces of the United States; File No. SR-NASD-2005-134).

 

2 See Securities Exchange Act Release No. 53182 (January 26, 2006), 71 FR 5391 (February 1,2006) (Order Approving a Proposed Rule Change Relating to the Status of Former Registered Persons Serving in the Armed Forces of the United States; File No. SR-NASD-2005-135).