Interpretive Letter to Klia Ververidis, Esq., AssetStream Corporation
March 19, 2001
Klia Ververidis, Esq.
400 Unicorn Park Drive
Woburn, MA 01801
Re: Intra-Firm Account Transfers
Dear Ms. Ververidis:
I am responding to your letter of December 6, 2000 requesting interpretative advice on NASD rules applicable to intra-firm transfers. Specifically, you ask if NASD has any rules or regulations that establish minimum requirements or specific standards for customer authorization of intra-firm account transfers. You state that an example of an intra-firm transfer is the movement of a specified number of shares of a security from the account of a customer at a member firm to the account of another customer at the same member firm.
The NASD has no rules or regulations that establish minimum requirements or specific standards for customer authorization of intra-firm account transfers. However, such transfers must be conducted in a manner consistent with a member's obligation to observe high standards of commercial honor and just and equitable principles of trade pursuant to NASD Rule 2110. Further, the staff believes that such transfers should be effected within a reasonably prompt period of time.
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 you have raised based on the facts as you have described them in your letter, and does not address any other rule or interpretation of the NASD, or all the possible regulatory and legal issues involved.
Sarah J. Williams
Assistant General Counsel
Frederick F. McDonald, District Director