Interpretive Letter to Christine A. Edwards, Morgan Stanley Dean Witter & Co.
June 8, 1998
Ms. Christine A. Edwards
Executive Vice President and Chief Legal Officer
Morgan Stanley Dean Witter & Co.
New York, New York 10036
Dear Ms. Edwards:
I am responding to your letter of May 13, 1998 on behalf of Morgan Stanley Dean Witter & Co. ("MSDW"), Morgan Stanley & Co. Incorporated ("MS"), and Dean Witter Reynolds Inc. ("DW") concerning your proposal for the use of the name "Morgan Stanley Dean Witter," on signs, in advertisements, and on letterhead and business cards (collectively, "the public communications") by MS and DW, both of which are members of the Association. I understand the facts to be as follows:
MSDW is the parent company of MS and DW. In connection with the merger that resulted in MSDW owning both MS and DW, you propose to change their respective legal names to "Morgan Stanley Dean Witter & Co. Inc." and "Morgan Stanley Dean Witter Inc."
Prior to the merger, most of DW’s clients were individuals rather than institutions; conversely, MS’s client base was primarily institutional. Since the merger, the two broker-dealers have further clarified their separate client coverage responsibilities along individual and institutional lines. While some individual accounts will continue to reside at MS, the vast majority of the accounts of individuals whose net worth is less than $1 million will be serviced by DW.
Your proposal is connected with MSDW’s strategy of creating a single, global brand, which you believe would be undermined by including additional legal names of the separate entities on the public communications. You also indicate that your proposal will not raise the potential that customers of either entity will be confused as to their broker-dealer’s identity. As described above, you indicate that there will be a continuing segregation of services to individual and institutional clients. In addition, other individual customer communications, including account applications, account statements, transaction confirmations, designation of beneficiary forms, joint account agreements, gain and loss summary enrollment forms, and margin agreements, will contain the legal name of the appropriate broker-dealer. In addition, customer statements and confirmations contain the address and telephone number of the branch and the name of the client’s account executive.
You also indicate other factors make it highly unlikely that a prospective individual client would mistakenly attempt to open an account at MS rather than DW. You state that MS has only five branch offices in the United States, compared to DW’s network of 399 offices. In addition, MS offices are not open to the general public, and access by non-employees is by appointment only. If an individual seeking brokerage services did enter an MS office, the individual would be referred to a DW office. Conversely, if a prospective institutional client went to a DW office, it would be referred to MS.
Finally, you indicate that you know of no other member firm that is using another name that may be confusingly similar to those of MSDW, MS, or DW such that the use of the corporate modifier would be necessary to distinguish the identity of another firm from those entities, and NASD Regulation staff has not identified another such firm.
Under the general standards set forth in NASD Rule 2210(f)(2), "[a]ny communication used in the promotion of a member’s securities business must clearly and prominently set forth the name of the Association member." Under the circumstances as described in your letter and based on your representations, we believe that the use of the name "Morgan Stanley Dean Witter" by either MS or DW on the public communications would adequately denote the "name of the Association member" for purposes of this provision.
Please note that the opinions expressed herein are staff opinions only and have not been reviewed or endorsed by the Board of Directors of NASD Regulation, Inc. This letter responds only to the issues that you have raised based on the facts as described, and does not address any other rule or interpretation of the Association, or all the possible regulatory and legal issues involved.
Mary Alice Brophy
Executive Vice President
NASD Regulation, Inc.
cc: John Ramsay