[13548]
May 29, 2001
TO: ADVERTISING COMPLIANCE ADVISORY COMMITTEE No. 5-01
EQUITY MARKETS ADVISORY COMMITTEE No. 16-01
SEC RULES COMMITTEE No. 41-01
RE: NASDR REQUEST FOR COMMENT ON MODERNIZING NASD RULES
The NASD has issued a Special Notice to Members1 (a copy of which is attached)
requesting comment on steps that can be taken to streamline NASD rules. The request for
comment is a continuation of a 1998 NASDR review of NASD rules to: (1) determine if there are
obsolete or otherwise unnecessary rules that could be repealed or that should be modernized in
light of technological or industry developments; and (2) determine if particular rules should
distinguish between retail and institutional customers in their application. At that time, the
Institute filed a comment letter responding to the NASDR’s review recommending specific
changes to NASD rules in the areas of: advertising; confirmations; forwarding proxy materials;
the corporate financing rule; selling concessions; and cash compensation.2
NASDR now has determined to continue its review to determine if there are additional
steps that should be taken to modernize NASD rules and has retained a consultant to assist in
estimating the burdens and evaluating the benefits of such rules. The Notice to Members states
that in those instances where the regulatory burden of a rule significantly outweighs the benefit,
or the rule no longer works efficiently given new technologies, NASDR will look at revising the
rule.
Comments are due to the NASDR by July 2, 2001. If you have any suggestions that
you would like the Institute to include in a possible comment letter, please contact the
undersigned by phone at 202-371-5408, by fax at 202-326-5839, or by e-mail at
aburstein@ici.org no later than June 8.
Ari Burstein
Associate Counsel
Attachment
1 Special NASD Notice to Members 01-35 (May 2001).
2 See Memorandum to Advertising Compliance Advisory Committee No. 6-99, Closed-End Investment Company
Committee No. 5-99 and SEC Rules Committee No. 12-99, dated February 16, 1999.
2Attachment (in .pdf format)