NASAA Approves Model Rules for Sales of Securities at Financial Institutions

Washington, DC, October 22, 1998 - During its Fall Conference, the membership of the North American Securities Administrators Association (NASAA) approved "Model Rules for Sales of Securities at Financial Institutions." Because the rules largely track federal standards, the Institute had supported their adoption in its comment letter. In a memorandum accompanying the model rules, the NASAA Securities Activities of Banks Committee specifically notes that "compliance with NASD Rule 2350 and the pertinent provisions of the Interagency Statement [on Retail Sales of Non-Deposit Investment Products] should constitute compliance with the Model Rule."

The model rules must be adopted by individual states to have any force or effect. To ensure the rules' continued conformity with requirements under federal law, the Committee noted that it will encourage states contemplating adoption of the Model Rules to include language that would incorporate any future amendments to NASD Rule 2350 and the Interagency Statement.