Draft ICI Comment Letter on Proposed Harmonization of NASD And NYSE Definitions of "Branch Office;" 3/20 Conference Call

 

 

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March 15, 2007

TO: SEC RULES COMMITTEE No. 27-07
CHIEF COMPLIANCE OFFICER COMMITTEE No. 6-07
COMPLIANCE ADVISORY COMMITTEE No. 5-07
BROKER/DEALER ADVISORY COMMITTEE No. 16-07     RE: DRAFT ICI COMMENT LETTER ON PROPOSED HARMONIZATION OF NASD AND NYSE DEFINITIONS OF "BRANCH OFFICE;" 3/20 CONFERENCE CALL

 

As we previously informed you, in February NASD published for comment revisions to its definition of “branch office.” [1]  This proposal is intended to harmonize NASD’s definition with that of the New York Stock Exchange.  In response to NASD’s request for comment, the Institute has prepared the attached draft letter, which is briefly summarized below. 

 

Comments on the proposal are due to NASD by March 26th.  The Institute will hold a conference call on Tuesday, March 20th at 2 p.m. Eastern to discuss the letter.  If you plan to participate on the call, please let us know by sending an email to Tlegal@ici.org as soon as possible, but no later than Monday, March 19th.  If you are unable to participate in the call but have comments on the draft letter, please provide them to Tami Salmon prior to the call by phone (202-326-5825) or email (tamara@ici.org).

 

The Institute’s draft letter recommends two revisions to NASD’s proposal.  The recommended revisions would result in treating as non-branch locations personal residences of mutual fund regional distributors and of principals who review the advertising of a mutual fund’s principal underwriter.  This treatment would be conditioned on the fact that no sales functions are conducted from the location and it is not held out to the public as a branch office.  The draft letter notes that the supervisory activities occurring from the personal residences of regional distributors and reviewers of advertising are so limited as to not necessitate the registration of these locations as branch offices.  It also notes that our recommended treatment of these locations is sensible and would not compromise investor protection.

 

Tamara K. Salmon
Senior Associate Counsel

Attachment

endnotes

 [1] See Institute Memorandum to SEC Rules Committee No. 18-07, Chief Compliance Officer Committee No. 4-07, Compliance Advisory Committee No. 2-07, Broker/Dealer Advisory Committee No. 14-07 [No. 20898], dated February 23, 2007.