Proposed Amendment to Rule Relating to Execution of Investment Company Portfolio Transactions

NASD has filed with the SEC a proposed rule change to amend NASD Rule 2830(k). Rule 2830(k) generally prohibits members from favoring the sale of shares of any mutual fund on the basis of brokerage commissions received or expected by the member from any source, including the fund. The rule permits a member to sell a mutual fund that considers the sale of its shares as a factor in the selection of broker/dealers to execute its brokerage transactions. NASD proposes to eliminate this exception and prohibit members from selling any mutual fund if the member knows or has reason to know that the fund or certain of its affiliates have entered into an agreement or understanding to direct fund portfolio securities transactions in exchange for the promotion or sale of fund shares.

TitleFormat - SizeStatus
Text of Proposed Rule ChangePDF - 36.37 KB
Federal Register NoticePDF - 57.05 KB
Approval OrderPDF - 53.04 KB