Guidance

Application of NASD Rule 2830(l)(5)(D) to sales contests involving sales personnel who perform marketing services.

The expansion of the NASD's sales practice authority over group variable contracts in August 1996 requires that broker/dealers apply NASD rules to all their sales of group variable contracts, including pre-August 1996 variable contracts. Thus, broker/dealers who had not set up record-keeping procedures for pre-August 1996 contracts must now do so.

In an order settling an enforcement action by the Commodity Futures Trading Commission, an undertaking not to apply for registration for period of three years operates as the functional equivalent of an order suspending registration. One who consents to such an undertaking is statutorily disqualified from registration under Article III, Section 4 of the NASD By-Laws.

Fair Labor Standards Act class actions are ineligible for arbitration in the NASD Regulation forum.

Mutual fund offeror may directly reimburse personal travel expenses of registered representatives that attend training and education meetings, provided appropriate records are maintained.

Applicability of Rule 3230(a) to secondary or sub-clearing arrangements with foreign securities firms.

Rule 3060 does not limit ordinary and usual business entertainment provided by a member or its associated persons to the member's clients and their guests.

Non-cash compensation sales contest permissible under Conduct Rule 2820(h) where member sells only one variable annuity and one variable life product and appropriate records are maintained.

A sales incentive program can combine non-conforming criteria based on sales prior to January 1, 1999 with conforming criteria based on sales subsequent to January 1, 1999 for incentives to be provided prior to June 30, 2000.

A partnership registering as a broker/dealer, which will be trading only for its own account, has no customers for purposes of Rule 2330(f).

Exemptive request denied: the OATS Rules do not provide NASD Regulation with the authority to grant exemptions from any of the OATS requirements.

The Firm Quote Rule (SEC Rule 11Ac1-1) requires a member firm to execute trades submitted to it by a firm that has exceeded its Super Cap status unless: (i) the firm had failed to settle on a trade the previous day, (ii) ACT has publicized that the firm has exceeded its Super Cap status and its clearing firm is not willing to honor the trade, or (iii) the firm's clearing firm has deleted the clearing relationship.

Scope of permissible functions of a Compliance Registered Operations Principal (CROP).

Short Sale Netting Requirements and Aggregation Units