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2460. Payments for Market Making
This rule is no longer applicable. NASD Rule 2460 has been superseded by FINRA Rule 5250. Please consult the appropriate FINRA Rule.
(a) No member or person associated with a member shall accept any payment or other consideration, directly or indirectly, from an issuer of a security, or any affiliate or promoter thereof, for publishing a quotation, acting as market maker in a security, or submitting an application in connection therewith.
(b) The provisions of paragraph (a) shall not preclude a member from accepting:
(1) payment for bona fide services, including, but not limited to, investment banking services (including underwriting compensation and fees); and
(2) reimbursement of any payment for registration imposed by the Securities and Exchange Commission or state regulatory authorities and for listing of an issue of securities imposed by a self-regulatory organization.
(c) For purposes of this rule, the following terms shall have the stated meanings:
(1) "affiliate" shall have the same definition as used in Rule 2720 of the Business Conduct Rules of the Association;
(2) "promoter" means any person who founded or organized the business or enterprise of an issuer, is a director or employee of an issuer, acts or has acted as a consultant, advisor, accountant or attorney to an issuer, is the beneficial owner of any of an issuer's securities that are considered "restricted securities" under Rule 144, or is the beneficial owner of five percent (5%) or more of the public float of any class of an issuer's securities, and any other person with a similar interest in promoting the entry of quotations or market making in an issuer's securities; and
(3) "quotation" shall mean any bid or offer at a specified price with respect to a security, or any indication of interest by a member in receiving bids or offers from others for a security, or an indication by a member that he wishes to advertise his general interest in buying or selling a particular security.
|Amended by SR-NASD-97-85 eff. Dec. 1, 1997.
Adopted by SR-NASD-97-29, eff. July 3, 1997.
Selected Notices: 75-16, 92-50, 96-83, 97-46.