Notice to Members 04-30

NASD Reminds Firms of Sales Practice Obligations In Sale of Bonds and Bond Funds

As the number of retail customers investing in bonds and bond funds grows, NASD is concerned that many investors may not fully appreciate the risks and costs associated with such products. It is the responsibility of firms to take appropriate steps to ensure that their registered representatives understand and inform their customers about the risks as well as the rewards of the products they offer and recommend. The purpose of this Notice is to remind firms that sell bonds and bond funds of their sales practice obligations in connection with such products.

Questions or comments concerning this Notice may be directed to Sharon Zackula, Assistant General Counsel, Office of General Counsel, Regulatory Policy and Oversight (RPO), at (202) 728-8985; or Laura Gansler, Assistant General Counsel, Office of General Counsel, RPO, at (202) 728-8275.