NASD Notice to Members 03-48 - August 2003

SEC Approves Increase to the Trading Activity Fee

Executive Summary

On August 7, 2003, NASD filed with the Securities and Exchange Commission (SEC) a proposed rule change to extend for two years the effectiveness of NASD rules that govern the use of bond mutual fund volatility ratings in member sales material. The rule change was effective upon filing. NASD Interpretive Material 2210-5 permits members and associated persons to include bond mutual fund volatility ratings in supplemental sales literature, subject to certain conditions. NASD Rule 2210(c)(3) requires supplemental sales literature containing bond mutual fund volatility ratings to be filed with the Advertising Regulation Department (the Department) for review and approval at least 10 days prior to use.

 

On February 29, 2000, the SEC approved IM-2210-5 and Rule 2210(c)(3) on an interim 18-month pilot basis. In August 2001, NASD extended the pilot for two-years, until August 31, 2003. The most recent rule filing extends these rules’ effectiveness for an additional two years, until August 31, 2005.

 

Questions or comments concerning this Notice may be directed to Joseph P. Savage, Counsel, Investment Companies Regulation, Regulatory Policy and Oversight, at (240) 386-4534, or Philip A. Shaikun, Associate General Counsel, Regulatory Policy and Oversight, at (202) 728-8451.