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FINRA

 

For Release:
Contact:
Friday, November 15, 1996
Nancy A. Condon - (202) 728-8379

NASD Regulation Boosts Voice of Investors in Rule-Making Process

Washington, D.C.--Direct public comment about rules proposed by NASD Regulation, Inc., is being solicited under steps instituted today by the self-regulatory organization. In addition to its current practice of notifying NASD members of pending rule proposals, NASD Regulation will post a public notice on its Web site, seeking comments from key investor, consumer, and seniors' organizations. NASD Regulation will also hold periodic forums for individual investors to present their views.

 

"We are here to serve investors, so it's logical that we want to hear from them about our proposed rules," said NASD Regulation President Mary Schapiro. "We will seek comment on current proposals, and then use public forums to gauge the views of investors about issues that may be addressed in future rule making. Our goal is to bring about a more open rule-making process that incorporates the input of an array of constituencies, investors foremost among them."

 

Michael Jones, Director of NASD Individual Investor Services, said "We look forward in this office to helping make sure that the voice of individual investors is heard loud and clear in the NASD rule-making process. We will work directly with key investor, consumer, and seniors organizations to get their input. This office also will work with NASD Regulation President Mary Schapiro to hold periodic issues forums starting in 1997."

 

The investor forums, according to Schapiro, will not be pegged to any existing NASD Regulation rule proposals. Instead, the public comment sessions will focus on topics either known to be of interest to investors or the subject of possible future NASD Regulation rule making.

 

"We want to hear directly from investors and we don't want to go through a cumbersome, bureaucratic process to do it," Schapiro said. "I look at this as a real opportunity to begin a dialogue with investors about topics that may not yet be part of the formal rule-making process. By listening to the public's views at an early stage, NASD Regulation will be able to do its business in a way that is more sensitive and responsive to the public's concerns."

 

In the past, NASD proposals were only subject to public input during the notice and comment period after publication by the Securities and Exchange Commission (SEC), a step required by statute. In practical terms, that meant that public comment occurred rarely, and only after the NASD had filed a formal proposal with the SEC. The new NASD Regulation approach will involve public notice at a much earlier stage, when the proposal, and what it is intended to accomplish, are first explained to NASD members. At that point, NASD Regulation will issue a news release, post the proposal on its Web site, and solicit comment from investor, consumer, and seniors groups.

 

"The federal laws put in place in 1934 did not contemplate much in the way of feedback from individual investors about pending proposals," Jones said. "Even though it is not legally required to do so, NASD Regulation will voluntarily make proposals known to the public at an earlier stage than is now the case. The hope is that this will result in rule making that does the best possible job of reflecting the priorities of investors and those representing them."

 

The changes announced today in the NASD Regulation rule-making process go into effect immediately.

NASD Regulation maintains a Web site that can be accessed free of charge by anyone. Investor, consumer, and seniors groups interested in being part of the rule-making input process should speak directly with NASD Individual Investor Services Director Michael Jones at (202) 728-6964.

 

An announcement about the date and location for the first NASD Regulation Investor Forum is expected during the first few months of 1997.