SEC Approves NASD Rule Change Regarding Nonelectronic Correspondence

Washington, DC, December 8, 1998 - The Securities and Exchange Commission recently approved changes to NASD Rule 3010 relating to incoming nonelectronic correspondence. In April 1998, NASD Regulation, Inc. adopted other amendments to Rule 3010 regarding the supervision and review of correspondence. However, NASDR delayed the effectiveness of a provision that would have required review of all incoming nonelectronic correspondence directed to registered representatives, and proposed changes to Rule 3010 in September to address such correspondence. The Institute filed comments on the proposed changes. The SEC order approves the September proposal. The rule change will require NASD member firms to develop supervisory procedures that include review of incoming nonelectronic correspondence directed to registered representatives for purposes of properly identifying and handling customer complaints, funds, and securities.

NASDR will issue a Notice to Members in the near future that will provide guidance on the implementation of the rule change, which will become effective 60 days following publication of the Notice.