Requirements change, New Disclosures Proposed
The NASD posted NASD Notice to Members 00-51 (August 2000), announcing that the SEC has approved amendments to NASD Rule 2520 relating to margin requirements for exempted borrowers, good faith accounts, joint back office arrangements, control and restricted securities, and options transactions.
The amendments become effective on August 21, 2000, with a six-month phase-in period for the implementation of the amendments relating to joint back office arrangements.
Notice 00-51 is available in PDF and text formats at http://www.nasdr.com/2610_2000.asp
The NASD yesterday also announced that its Board of Governors has approved a proposed rule amendment that would require member firms to provide to retail customers a written statement that fully describes the risks associated with trading securities in a margin account.
Members would be required to provide the margin disclosure statement to customers, electronically or on paper, prior to or at the opening of an account and annually thereafter.
The rule proposal has not yet been filed with the SEC, which must approve it prior to its effectiveness.
The NASD press release announcing the proposal is available at http://www.nasdaqnews.com/news/pr2000/ne_section00_173.html
Copyright 2000, John M. Baker, Esq., Stradley, Ronon, Stevens & Young, LLP, 1220 19th Street, N.W., Suite 700, Washington, DC 20036 – (202) 822-9611- Fax (202) 822-0140 This article was originally posted to the FundLaw List, http://www.egroups.com/group/fundlaw. To subscribe to FundLaw, send a blank e-mail to firstname.lastname@example.org
Nothing herein is intended as legal or financial advice. The law is different in different jurisdictions, and the facts of a particular matter can change the application of the law. Please consult an attorney or your financial advisor before acting upon the information contained in this article.
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.