Notice to Members 03-70

NASD Reminds Members of Their Duty to Cooperate in Arbitration Discovery Process

NASD rules require parties to NASD arbitrations to cooperate in the voluntary exchange of documents and information, and to respond to discovery requests from other parties within a certain time. In addition, the NASD Discovery Guide and Document Production Lists specify which documents are presumed to be discoverable in customer disputes. Absent a written objection, or an agreement by the parties to the contrary, parties must exchange documents listed on applicable Document Production Lists within the specified time frames.

NASD has become increasingly aware of instances in which parties are not complying with their duty to cooperate in the exchange of documents requested by parties or listed on applicable Document Production Lists within the specified time. NASD will not tolerate abuses of the discovery process. NASD is issuing this Notice to Members to: (1) remind members and associated persons of that duty; and (2) notify them that NASD Dispute Resolution will continue to monitor compliance with its discovery rules, and will refer perceived abuses to NASD Regulatory Policy and Oversight for disciplinary review.

Questions regarding this Notice may be directed to Laura Gansler, Counsel, NASD Dispute Resolution, at (202) 728-8275, or via e-mail.