finra

FINRA

For Release:
Contact:
Monday, April 21, 1997
Nancy A. Condon - (202) 728-8379

NASD Regulation Create New Advertising Investigating Unit

Washington, D.C.--NASD Regulation today announced that it has created a new unit to investigate complaints from consumers, regulators, and broker/dealer firms about brokerage advertising and marketing materials.

 

Under the direction of NASD Regulation's Advertising Regulation Department, the new unit will conduct investigations and provide its expertise to the NASD Regulation Enforcement Department and the organization's 14 District Offices.

 

"The tremendous growth in the volume and the variety of sales materials disseminated in the securities industry today demand that NASD Regulation move aggressively to ensure investors are protected, and developing this office will better enable us to do that," said R. Clark Hooper, Senior Vice President of Disclosure and Investor Protection. "In addition to focusing our resources in this critical area, we've created a single unit to coordinate the investigation of complaints from investors, federal and state regulators, and broker/dealer firms about advertising and sales materials." Hooper also announced that Amy C. Sochard, a long-time NASD Regulation official, will head the new unit. Sochard, an NASD Regulation Assistant Director, joined the Advertising Regulation Department in 1986. She earned a B.A from the University of Virginia.

 

The Advertising Regulation Department reviews all advertising and sales materials used by approximately 5,500 broker/dealer firms. It is expected that the Department will review approximately 60,000 filings in 1997. Hooper said the Department will also:

 

Bolster its spot checking of broker/dealer marketing materials (such as research reports and other general literature) that do not require NASD approval.

 

Step-up its program to prioritize the review of broker/dealer marketing materials. The Department will continue to conduct a full analysis of materials that may raise specific regulatory questions, and will begin to conduct a more limited review of certain materials to ensure that all filings remain subject to regulatory standards.

 

"These steps are all focused on ensuring that investors receive information that's accurate, timely, and helpful," said Thomas M. Selman, Director of the Advertising/Investment Companies Regulation Department.

 

Current NASD Regulation rules setting requirements for the materials that must be submitted and the timetable for submission of advertising and sales materials will remain the same. New broker/dealer firms are required to have their materials pre-cleared by NASD Regulation during their first year in the business. In general, advertisements and sales literature for mutual funds, variable products, and public direct participation programs must be submitted within 10 days of first use. Broker/dealer firms will continue to be able to submit their materials for pre-use review with no alterations in either time or filing fees, and will continue to bear responsibility for the information they use.