SEC Approval of Amendment to Article VI, Sections 3 and 4 of NASD By-Laws Re: Suspension or Cancellation of Registration for Failure to Pay Fees, Dues, or Other Assessments
The Securities and Exchange Commission has approved an amendment to Article VI, Sections 3 and 4 of the NASD By-Laws to provide for the suspension or cancellation of the registration of an associated person in the event of nonpayment of fees, dues, or assessments. The text of the amendment, which took effect August 29, 1991, follows this notice.
Article VI of the NASD By-Laws generally provides the Board of Governors with the authority to charge fees, dues, and assessments to members, issuers, and persons using facilities and systems operated or controlled by the NASD. Prior to the adoption of these rule changes, Section 3 of that Article authorized the NASD, after providing written notice, to suspend or cancel the membership of any member that fails to pay any fees, dues, assessments, or other charges. Section 3, however, did not apply to associated persons who fail to pay fees, dues, or assessments. Failure to pay forum fees associated with the arbitration process operated by the NASD could result in the suspension or cancellation of a firm's membership, but no similar remedy was available for associated persons.
The amendment to Sections 3 and 4 of Article VI of the By-Laws allows the NASD to suspend or cancel after 15 days notice, in writing, the registration of any associated person who has failed to pay fees, including arbitration forum fees, dues, assessments, or other charges owed for the use of facilities or systems operated or controlled by the NASD.
The NASD Board believes that this rule change will protect the integrity of the arbitration process and the marketplace and provide uniformity in the treatment of members and associated persons failing to pay fees.
Questions regarding the applicability of this rule change to arbitration forum fees may be directed to Kenneth L. Andrichik, Arbitration Department, at (212) 858-3915.
ARTICLE VI, NASD BY-LAWS
(Note: Proposed new language is underlined.)
Dues, Assessments and Other Charges
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Suspension or Cancellation of Membership or Registration for Nonpayment of Dues
Sec. 3. The Corporation after fifteen (15) days notice in writing, may suspend or cancel the membership of any member or the registration of any person in arrears in the payment of any fees, dues, assessments or other charges or for failure to furnish any information or reports requested pursuant to Section 2 of this Article.
Reinstatement of Membership or Registration
Sec. 4. Any membership or registration suspended or canceled under this Article may be reinstated by the Corporation upon such terms and conditions as it shall deem just; provided, however, that any applicant for reinstatement of membership or, registration shall possess the qualifications required for membership or registration in the Corporation.