Registration of Foreign Branch Offices by August 1, 1988
The NASD has amended its By-Laws to require that members register with the NASD all branch offices located outside the United States. Article I, Section (c) of the NASD By-Laws defines the term "branch office" to include any office that is owned or controlled by a member and that is engaged in the investment banking or securities business.
Recently, the Securities and Exchange Commission (SEC) approved1 the NASD's adoption of an amendment to delete the phrase "located in the United States" from the definition of "branch office," which technically restricted the NASD's branch office registration requirements to branches located only in the United States. The text of the amendment, with deleted language in brackets, is as follows:2
(c) "branch office" means an office [located in the United States] which is owned or controlled by a member, and which is engaged in the investment banking or securities business.
Therefore, the NASD is requiring members to register all branch offices regardless of their location by August 1, 1988. Pursuant to Article HI, Section 7 of the NASD By-Laws, the NASD must be promptly advised of lhe opening or closing of any branch office. Such advice must be filed with the NASD on Schedule E to Form BD, the Uniform Application for Broker-Dealer Application adopted by the SEC.
Branch offices located outside the United States are assigned to an NASD District Office for purposes of examination, elections and other district-level functions.
The amendment does not affect the availability of the "foreign associate" category of registration for persons associated with foreign branch offices.3
Questions concerning this notice can be directed to the NASD Membership Department at (301) 738-6715.
1 SEC Release No. 34-25428 (March 9, 1988).
2 This amendment is separate from the more extensive amendment to the definition of "branch office" published most recently in Notice to Members 88-11 (February 8, 1988). Those amendments will incorporate the change announced here.
3 Part IX of Schedule C to the NASD By-Laws exempts associated persons of a foreign branch office from the requirement to pass a qualification examination under certain circumstances.