Skip to main content

For updates and guidance related to COVID-19 / Coronavirus, click here.

9555. Failure to Meet the Eligibility or Qualification Standards or Prerequisites for Access to Services

This rule is no longer applicable. NASD Rule 9555 has been superseded by FINRA Rule 9555. Please consult the appropriate FINRA Rule.

(a) Notice to Member or Person of Suspension, Cancellation, Bar, or Limitation or Prohibition on Access to Services
(1) If a member or an associated person does not meet the eligibility or qualification standards set forth in the NASD By-Laws or Rules, NASD staff may provide written notice to such member or person stating that the failure to become eligible or qualified will result in a suspension or cancellation of membership or a suspension or bar from associating with any member.
(2) If a member, associated person, or other person does not meet the prerequisites for access to services offered by NASD or a member thereof or cannot be permitted to continue to have access to services offered by NASD or a member thereof with safety to investors, creditors, members, or NASD, NASD staff may provide written notice to such member or person limiting or prohibiting access to services offered by NASD or a member thereof.
(b) Service of Notice
NASD staff shall serve the member or person with such notice in accordance with Rule 9134. A copy of a notice under this Rule that is served on a person associated with a member also shall be served on such member.
(c) Contents of Notice
A notice issued under this Rule shall state the specific grounds and include the factual basis for the NASD action. The notice shall state when the NASD action will take effect and explain what the respondent must do to avoid such action. The notice shall state that the respondent may file a written request for a hearing with the Office of Hearing Officers pursuant to Rule 9559. The notice also shall inform the respondent of the applicable deadline for filing a request for a hearing and shall state that a request for a hearing must set forth with specificity any and all defenses to the NASD action. In addition, the notice shall explain that, pursuant to Rules 8310(a) and 9559(n), a Hearing Officer or, if applicable, Hearing Panel, may approve, modify or withdraw any and all sanctions or limitations imposed by the notice, and may impose any other fitting sanction.
(d) Effective Date of Limitation, Prohibition, Suspension, Cancellation or Bar
The limitation, prohibition, suspension, cancellation or bar referenced in a notice issued under this Rule shall become effective 14 days after service of the notice, except that the effective date for a notice of a limitation or prohibition on access to services offered by NASD or a member thereof with respect to services to which the member or person does not have access shall be upon service of the notice. A request for a hearing, pursuant to Rule 9559, shall stay the effectiveness of the notice, except that the effectiveness of a notice of a limitation or prohibition on access to services offered by NASD or a member thereof with respect to services to which the member or person does not have access shall not be stayed by a request for a hearing.
(e) Request for Hearing
A member or person served with a notice under this Rule may file with the Office of Hearing Officers a written request for a hearing pursuant to Rule 9559. A request for a hearing shall be made within 14 days after service of the notice. A request for a hearing must set forth with specificity any and all defenses to the NASD action.
(f) Failure to Request Hearing
If a member or person does not timely request a hearing, the limitation, prohibition, suspension, cancellation or bar specified in the notice shall become effective 14 days after service of the notice, except that the effective date for a notice of a limitation or prohibition on access to services offered by NASD or a member thereof with respect to services to which the member or person does not have access shall be upon service of the notice. The notice shall constitute final NASD action if the member or person does not request a hearing within 14 days after service of the notice.
(g) Request for Termination of the Limitation, Prohibition or Suspension
A member or person subject to a limitation, prohibition or suspension under this Rule may file a written request for termination of the limitation, prohibition or suspension on the ground of full compliance with the notice or decision. Such request shall be filed with the head of the NASD department or office that issued the notice or, if another NASD department or office is named as the party handling the matter on behalf of the issuing department or office, with the head of the NASD department or office that is so designated. The appropriate head of the department or office may grant relief for good cause shown.
(h) Notice to Membership
NASD shall provide notice of any final NASD action taken pursuant to this Rule in the next Notice to Members Disciplinary and Other NASD Action Section.
Adopted by SR-NASD-2003-110 eff. June 28, 2004.

Selected Notice: 04-36.