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91-9 Request for Comments From Members on Proposed Changes to the Definition of "Executive Representative" in Article III, Section 3 of the NASD By-Laws; Last Date for Comments: April 1, 1991


Senior Management
Legal & Compliance
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The NASD requests comments on changes to the definition of "Executive Representative" that are intended to better assure proper communication with members on important matters.


The NASD is in the process of better organizing the means by which it communicates with its members and other interested parties. Concerns have been raised in this process regarding the current definition of "Executive Representative" in Article III, Section 3 of the NASD By-Laws.

The current definition is quite broad and has, in the past, led to the designation as Executive Representative of persons who have limited authority in their firms. Since all important membership communications are directed to Executive Representatives, who are eligible to cast votes on behalf of their respective firms, the Board is concerned that important matters may not be directed to the appropriate person in each member. The Board proposes, therefore, to amend the definition of Executive Representative to require that only persons of authority in member firms be so designated to the NASD. The Executive Representative list will be maintained separately from the firm contact list in the Central Registration Depository (CRD). This will assure that the Executive Representative will receive all important NASD communications and that routine CRD notices will be directed to the appropriate persons designated by the member.

The NASD urges members and interested parties to comment on this and other relevant issues. Questions may be directed to John Vaughn in the Membership Department at (301) 590-6865 or Craig Landauer in the Office of the General Counsel at (202) 728-8291.

Written comments should be forwarded to Stephen Hickman, Office of the Secretary, National Association of Securities Dealers, Inc., 1735 K Street, NW, Washington, DC 20006-1506. Comments should be received by April 1, 1991.


Article III, Section 3

NASD By-Laws Executive Representative

(Note: New text is underlined; deleted text is in brackets.)

Sec. 3. Each member shall appoint and certify to the Secretary of the Corporation one "executive representative" who shall represent, vote and act for the member in all the affairs of the Corporation, except that other executives of a member may also hold office in the Corporation, serve on the Board of Governors or committees of the Corporation, or otherwise take part in the affairs of the Corporation. A member may change its executive representative upon giving written notice thereof to the Secretary, or may, when necessary, appoint, by written notice to the Secretary, a substitute for its executive representative. An executive representative of a member or a substitute shall (preferably) be a(n senior executive officer), member of senior management, and registered principal of the member, [if a corporation, a partner in case of a partnership, and the member himself if an individual, but he may be an employee and registered principal of the member, if given authority to act for the member in the course of the Corporation's activities.]

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