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8 Cards in this Set

  • Front
  • Back
NASD rules
- uniform practice code
- bylaws
- conduct rules
- advertising and sales lit
- code of procedure
- code of arbitration
uniform practice code
- standardizes business transactions
- good delivery - proper signatures - must be in round lots and only 1 odd lot
- settlement of trades - regular way, cash, ex-dividend date, accrued interest on bonds
bylaws
- registration - nontransferable
- must terminate from former broker dealer - U5 and get new U4 with new BD
- if out of industry or BD for 2 years or more must retest
- CE requirements - regulatory element - within 120 days of 2nd anniversary and every 3 years thereafter - firm element - annual reguirement defined by firms traning plan - no grandfathering
conduct rules
- allowed service charges - safekeeping securities
- prohibited practices - dealing with customer - churning, fictitious accounts, abusing discretionary authority, misrepresentation, omitting material information
- 5% markup policy
- influencing other bd employees - gifts of material value
- private securities transactions - employer's permission required
- outside affiliations
advertising and sales lit
- advertising - newspaper, tv, radio, billboards
- sales lit - research reports, market letters, circulars, seminars, cold call scripts- copies for 3 years - seminars must be kept for 2 years
- group or individual correspondence - if sending to fewer than 25 prospective clients - no prior principal approval required - principal must review either before or after sending to customer
code of procedure
- department of enforcement - reviews trade practice complaints - advises representative or firms in writing
- if conduct rules violation found, may censure or fine (unlimited), suspend (less than 2 years), expel (more than 2 years) or bar (never again), any penalty deemed appropriate - no jail
- appeals - go from dept of enforcement to national adjudicatory council to SEC to federal courts
- acceptance, waiver, and consent - plead guilty - most common
- minor rule violation summary complaint - no formal hearing, waive right to appeal, maximum fine of 2500
code of arbitration
- settle civil (monetary) disputes - member vs. member, member vs. bank, member vs. transfer agent
- customer must agree to process
- no appeals to arbitration
NYSE rules
- registration of RR - 120 day apprenticeship before dealing with public - employer permission required for outside employment
- know your customer rule
- accounts for employees of other members
- statement of accounts - at least quarterly
- holding mail - max 2 mths if US travel and 3 mths if foreign travel