News Release

NASD Foundation Funds Research to Improve Financial Product Disclosure Information and Calls for Additional Research Proposals

Washington, D.C. — The NASD Investor Education Foundation announced today it has awarded more than $400,000 to two universities for research projects aimed at making financial product information more meaningful and more accessible to the investing public.

The Foundation also launched its first 2006 grant program, Improving Disclosure to Investors.

The projects funded by the awards announced today include a $295,641 grant to The Center for Corporate Citizenship at the Carroll School of Management Boston College for Corporate Reporting of Social, Industry Cohort, and Governance Information, which will examine how non-financial performance measures are reported, in an effort to determine the extent to which investors value this information.

The second research project will be conducted by the Department of Communication Science at the University of Connecticut, which was awarded a $111,599 grant for Effects of Visual Primes on Improving Web Disclosure to Investors. This project will examine how the visual presentation of information online can influence investors' preferences, comprehension and retention of financial product disclosure information.

"The NASD Investor Education Foundation is dedicated to supporting important research that will help to provide investors with financial information that is clear and accurate," said Robert R. Glauber, Chairman & CEO of NASD, who also serves as Chairman of the NASD Investor Education Foundation. "By exploring new and improved ways of explaining often complicated, yet critical, information to investors, we are hopeful the industry will be able to provide the right balance of information in a meaningful way."

The NASD Foundation today also announced its first grant program of 2006, Improving Disclosure to Investors. The Foundation is appealing to non-profit groups, colleges and universities to submit grant proposals for research projects that examine the type of information, level of detail and method of distribution that would most benefit retail investors. Grant proposals must be submitted by April 7, 2006.

Successful projects will include an assessment of the current securities disclosure methodology, with project deliverables such as a research paper meriting publication in professional journals and a presentation to professionals involved in the development of securities regulations.  Reports must offer practical recommendations for making disclosure more effective for the benefit and protection of retail investors.

Of particular interest to the Foundation is research that addresses one or more of the following questions:

  • What type of information and degree of detail do investors consider essential to make informed investment decisions?
  • When is disclosure most effectively delivered?
  • What modes of delivery are most effective at reaching individual investors?
  • What are the best ways to enhance investor retention of material information?
  • What trends exist in the type of material information being disclosed, and are these trends constructive?
  • How can disclosure to investors be improved in such areas as equities, bonds and margin?
  • How does the reliance on, and need for, material information vary according to the distribution channel (for example, direct-sold versus broker-sold)?
  • Would more standardization of financial product disclosure help investors better understand the similarities and differences among financial products?
  • Does the amount of information disclosed dilute the value of the most material information?  If so, what is the right level of disclosure?

The NASD Foundation will be launching two additional grant programs this year. The 2006 General Grant Program will solicit proposals for education programs and research projects aimed at providing investors with information and tools to better understand investing and the markets. A more targeted program, the Life-Cycle Program, will focus on research about long-term investing and how ordinary people build wealth over their lifetime for retirement. Interested non-profit and educational organizations should visit for more details.

The NASD Investor Education Foundation, established in 2003, supports innovative research and educational projects that give investors the tools they need to better understand the markets and the basic principles of financial planning.  The Foundation has awarded more than $3.7 million in total to organizations for educational programs and research projects targeting the underserved segments of the population. For details about grant programs and other new initiatives of the Foundation, visit

NASD is the leading private-sector provider of financial regulatory services, dedicated to investor protection and market integrity through effective and efficient regulation.  NASD believes that understanding should precede investing - and that education is often the best form of investor protection. NASD's broad range of investor education programs include Investor Alerts, brochures and online resource guides on such critical topics as mutual fund class shares and 401(k) and college savings plans. This information is distributed through its Web site,, printed materials and Investor Forums.