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87-23 Effectiveness of Amendment to Section 66 of the NASD Uniform Practice Code Regarding Prompt Settlement of Syndicate Accounts
TO: All NASD Members and Other Interested Persons
ATTN: Syndicate Department
The NASD has adopted an amendment to Section 66 of its Uniform Practice Code that reduces the period required for final settlement of syndicate accounts from 120 days to 90 days. The text of the amendment, which will become effective May 1, 1987, is attached.
On October 1, 1985, the NASD adopted Section 66 to its Uniform Practice Code requiring syndicate managers to settle syndicate accounts within 120 days of the date securities are delivered by the issuer to, or for the account of, syndicate members. At that time, the NASD stated its intention to review members' experience under the 120-day requirement after one year with a view to reducing the settlement period to 90 days. The NASD Board of Governors and its Corporate Financing Committee have reviewed members' experience since adoption of Section 66 and have determined that a reduction in the period required to settle syndicate accounts is appropriate. The Board, therefore, has adopted an amendment to Section 66 reducing the period required for final settlement of syndicate accounts from 120 days to 90 days. Notice to Members 87-10, dated February 25, 1987, announced the Board's adoption of the reduced time period and gave the membership advance notice of the reduction in the settlement period.
The amendment to Section 66 will become effective May 1, 1987. Therefore, syndicate accounts are required to be settled within 90 days with respect to all corporate securities offerings effective on or after May 1, 1987.
All comments or questions pertaining to the amendment to Section 66 may be directed to the NASD Corporate Financing Department at (202) 728-8258.
Frank J: Wilsor
Executive Vice President
Legal and Compliance
AMENDMENT TO SECTION 66 OF THE NASD UNIFORM PRACTICE CODE*
Settlement of Syndicate Accounts
* New language underlined; deleted language bracketed.