NASD Notice to Members 05-21 - March 2005

NASD Requests Comment on Proposed Rule Requiring Members to Provide Additional Disclosures for Transactions in Debt Securities; Comment Period Expires April 19

Executive Summary

NASD is requesting comment on whether it should propose a new rule, Rule 2231, that would require members to provide additional disclosures to customers when effecting a transaction in a debt security for or with the account of a customer. Currently, members effecting such transactions are required to provide certain disclosures to their customers pursuant to Rule 10b-10 under the Securities Exchange Act of 1934 (Exchange Act). Under the proposed rule, members would provide additional transaction-specific disclosures to supplement the disclosures made under Rule 10b-10 and, with the transaction-specific disclosures, include a statement referring customers to NASD educational materials about bonds that would be located on NASD's Web site. (See Attachment A, Proposed Rule 2231, and Attachment B, draft educational materials.)


The proposed rule is based upon NASD standing committee input on a broad framework laid out by the Corporate Debt Market Panel (Panel), a group of 12 industry experts convened by NASD to make recommendations to NASD's Board of Governors regarding how to best ensure market integrity and investor protection in the corporate bond market.


Questions concerning this Notice should be directed to James L. Eastman, Assistant General Counsel, Office of General Counsel (OGC), Regulatory Policy and Oversight (RPO), at (202) 728-6961; Sharon K. Zackula, Associate General Counsel, OGC, RPO, at (202) 728-8985; or Elliot Levine, Chief Counsel, Transparency Services, Markets, Services and Information, at (202) 728-8405.

View Full Notice PDF 102 KB

The views, expressions, findings and opinions expressed in the comments on this Web page are solely those of the author(s) and FINRA accepts no responsibility for the content of the comments.

Comments By Date Received
R. Lowenstein (PDF 55 KB) 3/21/2005
Dominion Investor Services, Inc. (PDF 30 KB) 4/15/2005
Regional Municipal Operations Association (PDF 23 KB) 4/18/2005
Rhodes Securities, Inc. (PDF 33 KB) 4/19/2005
Cate Long (PDF 36 KB) 4/19/2005
Charles Schwab (PDF 52 KB) 4/19/2005
FIF Service Bureau Committee (PDF 23 KB) 4/19/2005
Wachovia Securities, LLC (PDF 44 KB) 4/19/2005
Smith Barney (PDF 63 KB) 4/19/2005
The Bond Market Association (PDF 52 KB) 4/20/2005
Deutsche Bank (PDF 102 KB) 4/25/2005