FINRA Manual: Contents
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87-10 Proposed 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
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's 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 approved an amendment to Section 66 reducing the period required for final settlement of syndicate accounts from 120 days to 90 days. The amendment will be effective upon approval by the Securities and Exchange Commission. Such approval is not expected for several months. The NASD wishes to give the membership advance notice of a potential reduction in the settlement period and encourage members to establish and implement procedures relating to the proposed requirement.
All comments or questions pertaining to the current requirement and proposed modification of Section 66 may be directed to the NASD's Corporate Financing Department at (202) 728-8258.
Frank J. Wilson
Executive Vice President
Legal and Compliance