January 26, 1989
TO: UNIT INVESTMENT TRUST COMMITTEE NO. 4-89
RE: NASD PROPOSAL TO RESTRICT PAYMENT OF REFERRAL FEES
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Attached is an NASD notice to members concerning a proposed
rule that would restrict payment of referral fees by NASD members
to unregistered parties. One issue raised by the proposal that
may be of special concern to unit investment trusts is that the
rule would prohibit such payments to banks, which are not
registered with the NASD. The Institute is considering whether
to argue that the NASD should distinguish between commissions and
other payments to banks, and provide an exemption in the rule for
the former.
Comments are due February 3. If there are payments other
than commissions that unit investment trust distributors make to
banks that might be prohibited by the rule or if there are other
comments on the proposal you feel the Institute should make,
please contact me as soon as possible.
Craig S. Tyle
Assistant General Counsel
Attachment