Proposed Amendments to Membership Application Rules

NASD has filed with the SEC a proposed rule change to amend NASD Rules 1014 and 1017. The proposed amendments to Rule 1014 would clarify the current standards of membership admission by specifically identifying as a decisional criteria the existence of unpaid arbitration awards or other adjudicated customer awards, as well as pending arbitration claims, and expand the application of Rule 1014 to include entities as potential controlling persons. The proposed amendments to Rule 1017 would expand NASD’s authority to review asset transfers to include any transfer involving 25% or more of assets and/or revenues that contribute 25% or more to earnings (measured on a rolling 36-month basis) and require that any seller that is not a member of the New York Stock Exchange, Inc. ("NYSE") file an application for asset transfers covered by the rule. In addition, amendments to Rules 1014 and 1017 would create a rebuttable presumption that certain membership applications should be denied if the applicants possess certain specified regulatory history.

TitleFormat - SizeStatus
Text of Proposed Rule ChangePDF - 79.43 KB
Amendment No. 1 to Proposed Rule ChangePDF - 115.69 KB
Amendment No. 2 to Proposed Rule ChangePDF - 9.95 KB
Federal Register NoticePDF - 58.28 KB
Extension LetterPDF - 6.05 KB
Approval OrderPDF - 39.93 KB