HelpFINRA Manual: Contents
FINRA Manual
Corporate Organization Notices
1989
89-77 Proposed Amendments to Article III, Section 12 of the NASD Rules of Fair Practice Re: Disclosure on Confirmations When Investment Companies Impose a Deferred Sales Charge on Redemption; Last Date For Comment: January 2,
89-76 Mandatory Participation by Self-Clearing Firms in the Automated Confirmation Transaction (ACT) Service Set for First Quarter 1990
89-71 SEC Approval of Amendments to Article IV, Section 1, and Article VI of the Rules of Fair Practice on Notice to Membership of Disciplinary Actions, Publication of Sanctions, and Availability of NASD Manual — Effective September 19,
89-69 SEC Proposes Significant Amendments to the Net Capital Rule; Last Date for Comments: December 18,
89-65 SEC Adoption of Rule 15c2-6 Re: Sales Practice and Suitability Requirements for Certain Low-Priced Securities
89-64 SEC Approval of Rule of Fair Practice Amendment Re: The Conduct of Accounts Engaged in Uncovered Short Option Transactions
89-59 Report on Group of Thirty Recommendations Regarding Clearance and Settlement and Request for Comments
89-57 SEC Approval of By-Law and Rule of Fair Practice Amendments on Providing Terminated Employees With Form U-5 and Obtaining Prior Form U-5 for Potential Employees — Effective September 1,
89-56 Proposed Amendments To Nasd Uniform Practice Code Re: Mandatory Buy-In for Short Sales; Last Date for Comments: September 1,
89-55 Proposed Amendments to the NASD Uniform Practice Code Re: Clearly Erroneous Trades; and Proposed Amendments to Article IX of the NASD Code of Procedure Re: Non-NASDAQ Grievances; Last Date for Comments: September 1,
89-54 Correction to Notice to Members 89-48 — All Non-NASDAQ OTC Securities Are Subject to Price and Volume Reporting Effective August 1,
89-52 SEC Approval of Amendment to Schedule C of By-Laws to Establish Waiting Periods Between Attempts to Pass Qualification Examinations — Effective July 17,
89-51 Proposed Amendments to Article III, Section 26, of the NASD Rules of Fair Practice Re: Cash and Noncash Concessions in Connection with the Retail Sale of Investment-Company Securities — Last Date for Comments: August 4,
89-50 NASD Initiates Computerized Extension Request Service for Regulation T And SEC Rule 15c3-3; New Form Required
89-49 SEC Approval of Amendment to Schedule C of NASD By-Laws to Require Members To Submit Applications for and Maintain the Registration of Only Such Persons Who Intend to Engage or Are Engaged in the Investment Banking or Securities Business For the Member
89-48 All Non-NASDAQ OTC Securities Are Subject To Price And Volume Reporting Effective September 1,
89-47 Notice to Membership of Disciplinary Actions; Publication of Sanctions; Availability of NASD Manual; Last Voting Date: August 11,
89-44 Amendment to Uniform Practice Code Re: Mandatory Buy-Ins for Cash or Guaranteed Delivery, Effective June 1,
89-41 SEC Approval of By-Laws Amendment on Filling Vacancies on District Committees — Effective March 8,
89-40 Proposed Amendment to Code of Procedure Re: Summary Remedial Proceedings; Last Date for Comments: June 1,
89-35 Misuse of "No Load" Terminology in the Offer of Mutual Funds That Have Contingent Deferred Sales Loads
89-34 Guidelines For Compliance With Article III, Section 27 of the NASD Rules of Fair Practice Re: Supervisory Practices and Procedures
89-33 Proposed Amendments to Article III, NASD Code of Procedure Re: Board of Governors' Reviews of Disciplinary Actions; Last Date for Comments: May 1,
89-28 Approval and Immediate Effectiveness of Amendment to Definition of ";Bona Fide Research" Under Article III, Section 24 of NASD Rules of Fair Practice
89-27 Treasury Finalizes Two Amendments Re: Currency Transactions; Reissues Current Currency Transaction Report Form
89-26 Securities and Exchange Commission's Proposed Rule 15c2-6 Re: Sales Practices in Pink Sheet Stocks
89-24 Proposed Amendment to Schedule C to the NASD By-Laws to Amend the Definition of a Direct Participation Program; Last Date for Comments: April 3,
89-23 Proposed Amendment Re: Providing Terminated Employees With Form U-5 and Obtaining Prior Form U-5 for Potential Employees Deadline for Voting: April 3,
89-21 Proposed Amendment Re: Predispute Arbitration Clauses in Customer Agreements; Last Voting Date: April 3,
89-20 Proposed Amendments to Article III, Sections 1-28 of the NASD Rules of Fair Practice — Last Voting Date: March 20,
89-17 Adoption of Rule Amendments Mandating the Automated Submission Of Trading Data Technical Specifications
89-16 Amendment to Appendix F Permitting Indeterminate Compensation in Public Direct Participation Programs — Effective February 1,
89-15 Adoption of Rule Amendment to Permit Withdrawal of Quotations from NASDAQ for Market-Maker Vacations — Effective December 20,
89-11 SEC Approval of Rule Amendment Requiring Filing of Advertising and Sales Literature for Investment Company Securities — Effective March 1,
89-4 Proposed Mandatory Participation by Clearing Members in Reconfirmation and Pricing Services (RECAPS); Last Date for Comment: February 3,
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89-58 Amendment Re: Predispute Arbitration Clauses in Customer Agreements
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*These are suggested departments only. Others may be appropriate for your firm.
EXECUTIVE SUMMARY
In conjunction with its approval of various amendments to the NASD Code of Arbitration Procedure, the Securities and Exchange Commission recently approved an amendment to Article III, Section 21, of the NASD Rules of Fair Practice. The amendment will require each member using a predispute arbitration clause in a customer agreement after September 7, 1989, to highlight that clause and to include similarly highlighted disclosures concerning the nature of arbitration and the waiver of the customer's right to litigate disputes arising under the agreement.
The amendment also prohibits the use in any agreement of any language that limits or contradicts the arbitration rules of any self-regulatory organization, limits the ability of a party to file a claim in arbitration, or limits the ability of the arbitrators to make an award under the arbitration rules of a self-regulatory organization and applicable law. The text of the proposed amendment follows this notice.
BACKGROUND AND ANALYSIS
In keeping with its support for the continued improvement of securities industry arbitration as a fair, expeditious, and economical means for the resolution of disputes, the NASD, responding to suggestions of the Securities and Exchange Commission and others seeking more explicit disclosure of the existence and meaning of predispute arbitration clauses in customer agreements, filed with the SEC following approval by membership vote an amendment to Article III, Section 21, of the NASD Rules of Fair Practice.
On May 10, 1989, the SEC approved the NASD's proposed amendment to Article III, Section 21, set forth in NASD Notice to Members 89-21 (March 1989). The amendment applies to any member using a predispute arbitration clause in new agreements signed by an existing or new customer after September 7, 1989, the effective date of the amendment. The amendment will require each member using a predispute arbitration clause in a customer agreement to highlight that clause and to include similarly highlighted disclosures concerning the nature of arbitration and the waiver of the customer's right to litigate disputes arising under the agreement. The amendment also will prohibit the use in any agreement of any language that limits or contradicts the arbitration rules of any self-regulatory organization, limits the ability of a party to file a claim in arbitration, or limits the ability of arbitrators to make an award under the arbitration rules of a self-regulatory organization and applicable law.
Questions concerning this notice may be directed to Norman Sue Jr., Assistant General Counsel, NASD Office of General Counsel, at (202)728-8117.
PROPOSED AMENDMENT TO ARTICLE III, SECTION 21, OF THE NASD RULES OF FAIR PRACTICE
(Note: New language is underlined.)
Books and Records
Sec. 21. Requirements When Using Predispute Arbitration Agreements With Customers
