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For Your Information

Bulletin Board Designated As "Qualifying Electronic Quotation System"

On December 30, 1992, the Securities and Exchange Commission (SEC) granted the NASD's request for interim designation of the OTC Bulletin Board® service (OTCBB) as a "Qualifying Electronic Quotation System" for purposes of certain penny-stock rules that became effective on January 1, 1993. The SEC adopted these rules pursuant to the Securities Enforcement Remedies and Penny Stock Reform Act of 1990. Essentially, this action permits broker/dealers to utilize inside bid/ask prices displayed in the OTCBB to make certain price determinations and disclosures that are now required by the new rules.

Generally, these rules apply to broker/dealer transactions in penny stocks with or for customer accounts. The SEC's designation of the OTCBB as a qualifying system should facilitate a broker/dealer's compliance with Securities Exchange Act Rules 15g-3, 15g-4, and 15g-6. Additionally, the designation will assist firms in determining whether a security's price (based on an inside bid) causes it to be classified as a penny stock under Securities Exchange Act Rule 3a51-1. If you have any questions, please contact Michael Kulczak in the General Counsel's Office at (202) 728-8811 or Susan McDougall in Trading & Market Services at (202) 728-8150.

SEC Participates in CRD Phase II

Effective January 25, 1993, the Central Registration Depository (CRD) will begin processing broker/dealer filings for the Securities and Exchange Commission (SEC). Member firms that amend their Uniform Application for Broker-Dealer Registration (Form BD) on or after that date need only file the change with the NASD.® Because it will be able to review those amendments through CRD, the SEC will no longer accept hard-copy filings. For further details please refer to SEC Release No. 34-31660.

The SEC and the NASD view this as a major step toward "one stop" filing for the broker/dealer community because it eliminates the burden of duplicative filings.

Currently, 49 states and the Chicago Board of Options Exchange participate in CRD Phase II. Member firms considering registration changes should contact specific jurisdictions to determine if any submissions in addition to those made to CRD are necessary.

In the same release, the SEC authorized the NASD to process Form BD applications and Uniform Request for Broker-Dealer Withdrawal (Form BDW) on its behalf. The SEC will use CRD to review initial applications filed with the NASD and will accept them if all SEC criteria are met.

In addition, filing the Form BDW with the CRD for processing will constitute filing with the SEC. If you have any questions regarding these changes, call NASD Member Services Phone Center at (301) 590-6500.

North Carolina Increases Agent Registration, Re-registration, and Renewal Fees

Effective January 1, 1993, North Carolina increased its agent fees. Agent registration, re-registration, and renewal fees rose from $45 to $55. Agent renewal fees also increased to $55. This increase was effective with the 1992-93 renewal program. If you have any questions regarding these changes, call NASD Member Services Phone Center at (301) 590-6500.

Operation of The Nasdaq Stock MarketSM on December 31, 1993

The Nasdaq Stock MarketSM and the securities exchanges will be open for trading on December 31, 1993. When a determination is made concerning the observance of New Year's Day, January 1, 1994, information will be circulated regarding the trade date-settlement date schedule.

Questions regarding this item should be directed to the Uniform Practice Department at (212) 858-4341.

NASD Member Voting Results

As a member service, the NASD publishes the result of member votes on issues presented to them for approval in the monthly Notices to Members. Most recently, members voted on the following issues:

  • Notice to Members 92-56 — Proposed Recision of the Guidelines Regarding Communications With the Public About Investment Companies and Variable Contracts (Guidelines) and Proposed Amendments to Article III, Section 35 of the Rules of Fair Practice to Incorporate Items From the Guidelines. Ballots For: 1,768; Against: 154; and Unsigned: 18.

  • Notice to Members 92-57 — Proposed Amendments to Schedule E to the NASD By-Laws Regarding Potential Conflicts of Interest. Ballots For: 1,675; Against: 231; and Unsigned: 29.

Questions regarding this item should be directed to Stephen Hickman, President's Office, at (202) 728-8381.

NASD Mails New Edition of Guide to Information & Services

With this issue of Notices to Members, NASD members are receiving the December 1992 edition of the NASD Guide to Information & Services. This publication, updated semiannually, is arranged by subject and includes names and phone numbers of persons members may call for information and assistance.

Questions regarding this item may be directed to Sharon Lippincott, Communication Services, at (202) 728-8278.

What Do You Think of Our New Look?

Beginning with this edition, Notices to Members incorporates a modern look to make it more appealing and easier to read. This redesign is part of a general reformatting of all NASD publications that will continue through the coming year.

These changes are also intended to facilitate production of next year's edition of the Notices to Members bound volume collection. These Notices to Members bound volumes provide you with each year of Notices in a handy, ready-to-use format.

For more information on NASD publications, please call NASD Corporate Communications at (202) 728-6900. Or, if you have any questions or comments on Notices, please direct them to Thomas Mathers, Editor, at (202) 728-8267 or Sharon Lippincott, Associate Editor, at (202) 728-8278.

Major Medical Plan for Individuals Adjusts Rates in Most Cost Areas

Despite the national trend toward higher costs for medical coverage, our plan administrators report that premiums for the majority of those participating in the National Casualty HealthGuard Plus program will remain virtually the same as they have been since April 1992, and in many cases will be lower. Those in the high cost geographic areas, however, will experience some increase in keeping with the national trend.

In response to numerous requests, the Plan has added another deductible option of $5,000 per calendar year — also available as of April 1 — and the premium discount for covering spouses will automatically increase from 10 percent to 15 percent, applicable to both insured and spouse.

Additionally, on April 1, 1993, the lifetime maximum benefit will double to $2,000,000 and the maximum age for application for coverage will rise from 59 to 64. These changes reflect plan growth and the insurers' willingness to provide greatest possible flexibility.

For more information, call Benefits Administrators, Inc., at (800) 336-0883.

New Products Added to Series 7

The Series 7 examination will soon include questions on collateralized mortgage obligations (CMOs), long-term equity options, and capped index options. These products are not presently tested on the examination. The questions will be added to the pretest (unscored) group beginning April 12, 1993. After the pretest period, as early as May 12, 1993, acceptable questions will be scored. The total number of questions selected for each topic area in the examination will remain unchanged.

Questions dealing with long-term equity options and capped index options will be included among the questions on exchange-traded equity options (section 4.7.2) and exchange-traded index options (section 4.7.3), respectively. The questions will test the candidate's knowledge of underlying securities, exercise settlement, and other basic product information.

CMOs will be given equal weight with other types of mortgage-backed securities included in the content outline (section 4.3.2). The questions will cover the general characteristics and structure of CMOs, as well as the types of risk.

For further explanation, contact David Uthe at (301) 590-6695.

Correction to Notice to Members 93-12 (February 1993)

Due to an editing error, footnote 7 on page 54 of Notice to Members 93-12 (February 1993), "Questions and Answers About New NASD Rules Governing Investment Company Sales Charges — Article III, Sections 26(b) and (d) of the Rules of Fair Practice," is incorrect. The correct footnote language is:

7The SEC has stated that "[w]hether particular shareholder or other services are 'primarily intended to result in the sale of fund shares' and, therefore, must be paid under a 12b-1 plan, will depend on the surrounding circumstances." Investment Company Act Release No. 1643 (June 13, 1985).

Members Warned Against Fictitious Japanese Bond Refund Certificates

Responding to the fraudulent use of fictitious certificates called "Kanpukin Zandaka Kakuninsho," the Japanese Ministry of Finance has issued the following warning:

  • A "Kanpukin Zandaka Kakuninsho" is a fictitious certificate, allegedly issued by the Japanese Ministry of Finance, that certifies the existence of a remaining balance on a Japanese government bond refund. It claims to confirm that the Japanese Ministry of Finance will exchange the amount specified for an equivalent amount of Japanese government bonds. The Japanese government has already found several kinds of such fictitious certificates with face values ranging from 10 billion to 500 billion yen.

  • Although the police have arrested some persons attempting to use these certificates, the fraudulent use of these fictitious certificates seems to have been occurring repeatedly both in Japan and overseas. The Japanese Ministry of Finance has received frequent inquires, especially from abroad, as to whether the certificates are genuine.

  • In response, the Ministry of Finance has said that it never issued such "Kanpukin Zandaka Kakuninsho," and that such certificates are illegal.

Quarterly Press Release Now Included in Notices to Members

Beginning with this issue, we are now including the quarterly press release on The Nasdaq Stock MarketSM in Notices to Members. We hope you find the statistical information in this report useful.

Arkansas Increases Agent Registration, Re-Registration, and Renewal Fees

On April 7, 1993, Arkansas authorized the CRD to begin collecting agent registration, re-registration, and renewal fees of $75. This is an increase from the current $50 fee. Firm registration and renewal fees will remain at $300. If you have any questions regarding these changes, please call the Arkansas Securities Department at (501) 324-9260.

Paper and Pencil Series 7 Available in Spokane, Washington June 5

Effective June 5, 1993, candidates may take the General Securities Representative Examination (Series 7) at the Paper & Pencil Examination Center (Center) in Spokane, Washington, on the first Saturday of each month. In addition to the Spokane Center, candidates may take the Series 7 at the Centers in Anchorage, Alaska; Honolulu, Hawaii; and Great Falls, Montana.

To take the Series 7 examination at one of these locations, candidates must make an appointment by telephoning the NASD Member Services Phone Center in Rockville, Maryland at (301) 590-6500.

Appointments must be made with the NASD eight business days before the desired examination session.

Examination Revisions Announced

Effective July 1, 1993, some NASD examinations will reflect various recently implemented NASD and SEC rule changes. Please note that these changes will affect only the examinations that currently cover these rules.

  • The Net Capital Rules (SEC Rule 15c3-1) — the changes to the minimum net capital requirements, by class of broker/dealer, effective July 1 to December 31, 1993, as well as amendments to the securities haircuts, aggregate indebtedness, and contractual charges (refer to Notice to Members 92-72).

  • The small issue exemption from the registration requirements of the Securities Act of 1933 under Regulation A.

  • NASD Rules of Fair Practice — Section 10 (refer to Notice to Members 93-8); Section 35 (refer to Notice to Members 93-18); and Section 45 (refer to Notice to Members 92-60).

For further explanation, contact Carole Hartzog at (301) 590-6696.

Pennsylvania Increases Agent Registration, Re-registration, and Renewal Fees

On May 4, 1993, Pennsylvania increased its agent registration and re-registration fees to $75 to be effective on CRD as of May 7, 1993. Agent renewal fees increased to $60. Firm registration and renewal fees will remain at $250. If you have any questions regarding these changes, please call the NASD's Member Services Phone Center at (301) 590-6500.

NASD Member Voting Results

As a member service, the NASD publishes the result of member votes on issues presented to them for approval in the monthly Notices to Members. Most recently, members voted on the following issue:

  • Notice to Members 93-15 — Proposed Amendments to Articles VII and XII of the By-Laws and Article III of the Rules of Fair Practice to Make All Rule Approval Procedures Under the NASD's By-Laws Uniform. Ballots For: 1,683; Against: 478; and Unsigned: 11.

Questions regarding this item should be directed to Stephen Hickman, President's Office, at (202) 728-8381.

Educational Programs Added to Conference Schedule

The following educational programs are now on the 1993 NASD conference schedule:

October 13-14 Variable Insurance Products Compliance Seminar Washington, DC

A compliance seminar emphasizing advertising and distribution of variable annuity and variable life insurance.

Contact:
Carolyn Thrower (202) 728-6977

October 21-22 CRD Conference Rockville, Maryland An educational program addressing key registration issues including Special Registration Review (SRR), Firm Access Query (FAQS), the 1993 renewal process, CRD redesign, and NASD quality and service teams. Contact:
Richard Sheridan (301) 590-6523
Genevieve Fedorowicz (301) 590-6929

Look for program details and registration information in late August.

West Virginia, Wyoming Increase Registration, Re-Registration, and Renewal Fees

Effective July 1, 1993, West Virginia and Wyoming increased their agent registration, re-registration, and renewal fees as well as broker/dealer registration and renewal fees as follows:

West Virginia: Agent registration, re-registration, and renewal fee to $55. Broker/dealer registration and renewal fee to $250.

Wyoming: Agent registration, re-registration, and renewal fee to $35.

Broker/dealer registration and renewal fee to $200.

If you have any questions regarding these changes, please call the NASD® Member Services Phone Center at (301) 590-6500.

Colorado and Maine Increase Registration, Re-Registration, and Renewal Fees

Effective July 1, 1993, Colorado increased its agent registration, re-registration, and renewal fees to $23 and broker/dealer registration and renewal fees to $104. In addition, Maine increased its broker/dealer registration and renewal fees to $200. Maine's agent fees remained unchanged at $40.

If you have any questions regarding these changes, please call the NASD Member Services Phone Center at (301) 590-6500.

NASD Member Voting Results

As a member service, the NASD publishes the result of member votes on issues presented to them for approval in the monthly Notices to Members. Most recently, members voted on the following issue:

  • Notice to Members 93-35 — Proposed Amendment to the Procedures for Filling Vacancies on NASD Nominating Committees. Ballots For: 1,964; Against 122; and Unsigned: 11.

Questions regarding this item should be directed to Stephen Hickman, President's Office, at (2020)728-8381.

"800 Portability" Means You Own Your 800 Telephone Number

As the result of a Federal Communications Commission ruling that took effect May 1, 1993, your firm can now transfer your 800 telephone number from one longdistance company to another. Previously, firms wanting to change their long-distance carriers were inhibited by two factors: the direct costs associated with reprinting stationary, business cards, and marketing materials and the threat of lost business from customers not aware of the firm's new number. With "800 Portability" your firm can now switch long-distance carriers and retain your existing 800 number.

The NASD/MCI Long Distance Program offers members MCI 800 Service at discounted rates of 21 to 27 percent off MCI's regular rates based on usage. In addition, the NASD rebates an additional amount to participating firms. The MCI 800 Service offers members both nationwide and international coverage, single-number dialing, choice of dedicated or switch lines, routing and coverage control, and Direct Termination Overflow (a feature designed to ensure that your customers never receive a busy signal by automatically switching your 800 line call overflow to your normal business lines).

To compare your firm's existing 800 number features and costs with those available through the NASD/MCI Long Distance Program, or to find out about the other services available through the program, call (800) 688-8220.

Rule Changes You Should Note

Effective June 23, 1993, the Securities and Exchange Commission (SEC) approved amendments to Article III, Section 34, Appendix F, Section 5(e) of the Rules of Fair Practice that increased the limit on non-cash compensation or sales incentives that the sponsor of a Direct Participation Program or rollup may pay to an associated person from $50 to $100.

Effective August 10, 1993, the SEC approved amendments to Article IX, Section 4 of the By-Laws that eliminated the special election provisions for filling vacancies on Nominating Committees. Under the new provisions, the Nominating Committee will fill any such vacancies by appointment with such appointment to be effective until the next regularly scheduled election.

Applying the Free-Riding and Withholding Interpretation to Investment Partnerships Managed By Entities or Persons Associated With NASD Members

In the June 1993 Notices to Members, the NASD solicited comments on proposed amendments to the Free-Riding and Withholding Interpretation under Article III, Section 1 of the Rules of Fair Practice. One of the proposed amendments involved using the "carve out" mechanism (August 1992 Notices to Members) at the management level for investment partnerships that are managed by NASD members, their associated persons, or related entities. Several commenters asked if the National Business Conduct Committee (NBCC) could grant interim relief so that such partnerships could use this "carve out" mechanism prior to the rule change being permanently adopted. The NBCC has determined to grant such interim relief on similar terms to its prior grant of such relief for partnerships that had restricted persons as investors. The NBCC wishes to point out that in granting this relief, performance based fees cannot be used for purchases in the new issue account.

To obtain such interim relief, the investment partnership must establish the following policing mechanisms:

1. The investment partnerships will establish a separate brokerage account, with a separate identification number, for its new-issue purchases. At the end of each fiscal year, the general partners will certify in writing to its independent certified public accountants that: (a) all hot issues purchased by the partnership were placed in this new-issue account; (b) the partners participating in the new-issue account are not restricted persons under the Interpretation; and (c) no management fees are based upon the performance of securities in the new issue account.
2. Prior to the execution of the initial hot-issue transaction, the partnership's outside legal counsel will render an opinion that complies paragraph B of the section of the Interpretation titled "Investment Partnerships and Corporations."
3. As part of its audit procedure for the partnership, the independent certified public accountant will confirm in writing to the partner ship that all allocations for the new-issues account were made in accordance with the provisions of the applicable partnership agreement that restricts participation in hot-issue purchases.
4. The partnership will maintain in its files copies of the certifications, representations, and confirmations referred to in paragraphs (1) – (3) above for at least three years following the last purchase of a hot issue for the new-issue account.
5. The partnership will accept investment funds from other partnerships if such other partnerships provide the same documentation and assurances described in paragraphs (1) – (4) that restricted persons will not participate in the purchase of hot issues.
6. The certifications and documents required in paragraphs (1) – (3) shall be provided to the member holding such account at such time as these certifications and documents are filed with the partnership and its independent certified public accountant and the member shall make such documentation available to the NASD upon request.

To qualify for the interim relief described in this Notice, a member executing a hot issue transaction for an investment partnership with restricted persons as general or limited partners must receive, prior to the initial transaction, the certification from the general partner described in paragraph 1 and the opinion of counsel letter described in paragraph 2. The certification from the independent certified public accountant described in paragraph 3 above shall be obtained at the partnership's next audit.

Questions concerning this Notice should be directed to T. Grant Callery, Vice President and General Counsel, at (202) 728-8285; Craig L. Landauer, Associate General Counsel, at (202) 728-8291; or Lewis E. Antone at (202) 728-8245.

NASD Fidelity Bond Program Enhanced

The NASD Fidelity Bond Program has been enhanced to increase its value to NASD member firms and reflect the SEC-mandated increase in net capital requirements for 1994 (Notice to Members 92-72 for information on the new net capital requirements).

The NASD Fidelity Bond Program now offers members coverage up to $5 million (for firms that have not had any paid losses in the past three years) and with net capital requirements of less than $4,166,000. Previously, firms with net capital requirements over $416,000 had to use the Financial Institution Bond Form 14. NASD members can now use the Security Dealers Blanket Bond (SDBB) to apply for coverage in all states except Texas.

By using the SDBB, members receive additional benefits not available when using the standard Form 14. The SDBB provides the full limit of liability coverage for each and every loss, as opposed to the Form 14 coverage that ceases to exist once the firm's aggregate losses meet the policy limit (unless additional coverage is purchased by the firm for the balance of the year). It also provides firms with an automatic $25,000 audit expense coverage not available with the Form 14. Computer systems coverage, including voice-initiated transactions, is included in the SDBB. Additionally, firms have the opportunity to extend their coverage by purchasing an optional one-year discovery period to protect against losses later discovered that were sustained during the bond period.

In October, applications and information on the NASD-sponsored Fidelity Bond Program will be mailed to all NASD member firms. If you have additional questions on the program or would like to compare your existing coverage with the NASD program, please contact Seabury and Smith at (800) 922-9242.

Changes Enhance NASD/MCI Long Distance Program

Two recent changes have been made to the NASD/MCI Long Distance Program that further enhance the value and savings available through the program to NASD member firms.

Effective September 1, firms using MCI Data Services through the NASD/MCI Long Distance Program will receive monthly discounts on their MCI invoices of 4 to 20 percent off MCI's standard tariffed rates. Previously, participating members using this service only received a rebate from the NASD equal to 6 percent of their monthly data charges. Participating firms will now receive the appropriate MCI discount and the NASD rebate. MCI data services covered under the program include transmission speeds from 9600 bps up to TDS1.5.

In June, MCI introduced Proof Positive that will provide NASD members with several additional benefits. A quarterly report will be sent to each participating firm comparing its actual savings to AT&T. The report also compares your current service with other MCI services. If another MCI service would have reduced your long distance costs, the difference will automatically be credited to your firm's account by MCI. MCI also will recommend specific alternatives to assist you in reducing your monthly telephone charges.

Please call (800) 688-8220, for additional information on these program changes or to find out how to enroll in the NASD/MCI Long Distance Program.

SEC Extends Derivative Products Comment Period

The SEC is extending the comment period for Release No. 34-32256 (May 10, 1993 Federal Register) concerning derivative products. In its release, the SEC solicited comments on a broad range of questions regarding the impact of Net Capital Rule standards on broker/dealer participation in the derivative products market. The new deadline for comments is now December 17, 1993.

Persons interested in submitting written comments should file three copies with Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549. All comments should refer to File No. S7-17-93.

Examination Revisions Announced

Effective January 1, 1994, some NASD examinations will reflect recent SEC rule changes. Please note these changes only affect those examinations that cover these rules.

  • The Net Capital Rule (SEC Rule 15c3-1)—the changes to the minimum net capital requirements by class of broker/dealer, effective January 1 to June 30, 1994 (refer to Notice to Members 92-60 and Notice to Members 93-30).

  • Reports to Be Made by Certain Brokers and Dealers (SEC Rule 17a-5)—amendments to the rule give additional responsibilities to "designated examining authorities" (refer to Notice to Members 93-70).

  • Notification Provisions for Brokers and Dealers (SEC Rule 17a-11)—amendments to the rule eliminate certain filing requirements. However, the requirements to give notice remain basically unchanged (refer to Notice to Members 93-72).

For further explanation, contact Carole Hartzog at (301) 590-6696.

NASD Member Firm Insurance Program Eligibility Enhancements

The NASD Member Firm Insurance Program provides member firms employing 2 to 50 persons with group insurance coverage. The program previously excluded contracted branch offices and contracted employees from eligibility. Such branch offices and employees are now eligible to apply to the program if they meet the definition of a small group. The NASD Member Firm Insurance Program, underwritten through The Travelers, offers qualified participants Major Medical, Dental, Term Life, and Accidental Death and Dismemberment insurance. Available in all states and the District of Columbia, the program is tailored to conform to each state's laws and regulations. For additional information on the program or assistance in determining your group's eligibility, please contact Seabury and Smith at (800) 321-1998; in the Washington, DC area call (202) 296-8030, extension 353 or 354.

NASD Member Voting Results

As a member service, the NASD publishes the result of member votes on issues presented to them for approval in the monthly Notices to Members. Most recently, members voted on the following issues:

  • Notice to Members 93-50—Proposed New Section to the Rules of Fair Practice Relating to the Respective Obligations and Supervisory Responsibilities of Introducing and Clearing Firms. Ballots For: 1,429; Against: 397; and Unsigned: 211.

  • Notice to Members 93-51—Proposed Amendment to the Corporate Financing Rule Relating to Fairness and Reasonableness of Anti-Dilution Provisions in Underwriters' Warrants, Options, and Convertible Securities. Ballots For: 1,600; Against: 280; and Unsigned: 154.

  • Notice to Members 93-52Proposed Amendment Exempting Money Market Mutual Funds From Disclosure Requirements. Ballots For: 1,645; Against: 250; and Unsigned: 140.

Questions regarding these items should be directed to Stephen Hickman, President's Office, at (202)728-8381.

CMO Advertising Prefiling Requirement

On November 9, 1993, the Securities and Exchange Commission (SEC) approved a temporary extension for one year of the prefiling requirement relating to advertisements concerning collateralized mortgage obligations (CMOs). The prefiling requirement in Article III, Section 35(c)(2) of the NASD Rules of Fair Practice was adopted in 1992 and was set to expire on November 16, 1993. The temporary extension causes the prefiling requirement to continue in effect until November 16, 1994.

The NASD has also proposed in a separate rule filing making the CMO advertising prefiling requirement permanent. The temporary extension announced here will continue the requirement in effect until the SEC has completed its consideration of the NASD's proposal to make the requirement permanent.

NASD Member Voting Results

As a member service, the NASD publishes the result of member votes on issues presented to them for approval in the monthly Notices to Members. Most recently, members voted on the following issue:

  • Notice to Members 93-61—NASD Solicits Member Vote on New Rule Governing the Pricing of Open Orders; Last Voting Date: October 29, 1993. Ballots For 1,682; Against 232; and Unsigned 11.

Questions regarding these items should be directed to Stephen Hickman, President's Office, at (202) 728-8381.

The Nasdaq Stock MarketSM Launches Two New Indexes and Modifies Two Others

On November 1, The Nasdaq Stock MarketSM responded to requests for better performance indicators for Nasdaq-listed companies by launching two new indexes— Biotechnology and Computer—and changing the Utilities Index to the Telecommunications Index to reflect more accurately its composition. In addition, on October 26, the Nasdaq-100 Index®, a widely watched barometer of large-capitalization growth stocks trading on Nasdaq, was modified.

The Biotechnology and Computer Indexes—both market-value weighted—will include stocks listed in the Nasdaq National Market® and The Nasdaq SmallCap MarketSM.

When accessing these indexes on the Nasdaq Workstation®, the symbol for the Biotechnology Index is IXBIO, for the Computer Index it is IXCOM, and for the Telecommunications Index it is IXUT. To access through other services such as Quotron, etc., use the symbols IXB, IXR, and IXU, respectively.

On November 1, The Nasdaq Stock Market also changed its existing Utilities Index to a Telecommunications Index. During the past several years, the Nasdaq Utilities Index has become increasingly dominated by telecommunications issues, which last year comprised more than 90 percent of this index. Because the telecommunications issues have driven this index to its new record highs, the index needs to reflect its changing composition. The utilities issues have been moved to the Industrial Index, and the Telecommunications Index has been reset at a base value of 200.

The Nasdaq-100 Index was changed to better reflect the changing mix of Nasdaq's 100 largest non-financial companies. The new Nasdaq-100 Index will provide investment managers with a better means to build portfolios with many of Nasdaq's largest, non-financial growth companies. Options will soon be traded on the Nasdaq-100 Index by the Chicago Board Options Exchange, which has filed with the SEC to trade options and LEAPS (Long-term Equity Anticipation Securities) on the Nasdaq-100 Index.

Correction to Notice to Members 93-76

Notice to Members 93-76 in the November edition contains an error. The second line of the fifth paragraph under "Background and Description of the Proposal" on page 449 should read as follows:

"The NASD is proposing to amend the section to apply the preuse requirement to all investment company advertisements or sales literature that incorporate rankings or comparisons either not [emphasis added] generally published or created directly or indirectly by the investment company, its underwriter, or an affiliate."

The word "not" was omitted from the final version. Please note the correction in your November copy of Notices to Members.


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