NASDR Delays Effectiveness of Rule Amendments Regarding Public Correspondence

Washington, DC, July 15, 1998 - NASD Regulation, Inc. has announced a further delay in the effectiveness of one of the recently approved amendments to NASD Rules 3010 and 3110, which govern the supervision and review of correspondence with the public. Most of the rule amendments went into effect in April 1998; however, NASDR had delayed the effectiveness of a provision requiring review of all incoming written correspondence directed to registered representatives and related to a member's investment banking or securities business until July 7, 1998. NASDR is now further delaying the effectiveness of this provision until September 30, 1998.

NASDR states in the notice that at its June 25, 1998 Board of Directors meeting, the Board approved further proposed revisions to Rule 3010 that are intended to address the regulatory concerns necessitating the review of incoming written correspondence while also responding to concerns raised by member firms regarding the difficulty of conducting such review. NASDR anticipates that this proposed rule change will be submitted to the SEC by July 30, 1998. When that proposed rule change is filed, NASDR will request an indefinite delay of this provision until the SEC has acted on the rule filing. In the meantime, however, members will be required to review and report customer complaints as required by NASD Rule 3070(a)(2), keep and preserve all written customer complaints as required by Rule 3110(d), and establish procedures for the review of incoming and outgoing written and electronic correspondence consistent with Rules 3010(d)(1) and (2).