* See Memorandum to Closed-End Investment Company Committee No. 32-97, SEC Rules Committee No. 87-97 and
Unit Investment Trust Committee No. 55-97, dated September 8, 1997.
[9251]
September 17, 1997
TO: CLOSED-END INVESTMENT COMPANY COMMITTEE No. 33-97
SEC RULES COMMITTEE No. 91-97
UNIT INVESTMENT TRUST COMMITTEE No. 57-97
RE: DRAFT COMMENT LETTER ON REVISED NASD NON-CASH COMPENSATION
PROPOSAL
______________________________________________________________________________
Attached for your review is a draft letter on the NASDs revised non-cash compensation
proposal.* The draft letter expresses general support for the proposal, but recommends that the
NASD reinstate a provision that would restrict the payment of cash incentives directly to
persons associated with an NASD member. The letter states that these payments raise the same
concerns, and should be treated the same, as awards of non-cash compensation to individual
representatives.
In addition, the draft letter reiterates the Institutes recommendation that the proposal
be revised to permit NASD members to create in-house incentive programs that focus on a
designated broad investment objective or category, rather than including all investment
company securities sold by the member. Finally, the letter suggests technical changes related to
the proposed implementation of the rule amendments.
Comments on the proposal must be filed by September 26th. If you have any
comments on the attached draft letter, please call me at (202) 326-5822 by Tuesday,
September 23rd.
Frances M. Stadler
Associate Counsel
Attachment (in .pdf format)