FINRA Manual: Contents
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93-19 NASD Reminds Members to Settle Syndicate Accounts Within 90 Days of the Settlement Date
The NASD is reminding members that Section 66 of the NASD Uniform Practice Code (UPC) requires syndicate managers to settle syndicate accounts within 90 days of the syndicate settlement date. Members are, therefore, reminded to mail or, where appropriate, deliver checks to syndicate participants no later than the 90th day following settlement of the syndicate account. The relevant portion of the text of Section 66 follows this Notice.
Section 66 of the UPC requires the syndicate manager to make final settlement of syndicate accounts within 90 days of the syndicate settlement date.
It has come to the attention of the NASD that some syndicate managers are engaging in practices that flout the intent of Section 66. Syndicate members have reported receiving payments several days or weeks later than the 90th day but dated as of the 90th day. These circumstances suggest that syndicate managers are engaging in practices that effectively delay final payment of syndicate participants beyond the 90th day in circumvention of Section 66.
The NASD reminds members that the intent of Section 66 is to ensure that final settlement of syndicate accounts occur not later than the 90th day after the syndicate settlement date. The NASD believes that compliance with Section 66 mandates that syndicate managers mail or, where appropriate, deliver checks to syndicate participants no later than the 90th day following settlement of the syndicate account. Section 66 serves to set an outside limit on settlements. Members, however, are encouraged to settle accounts as quickly as possible.
The NASD also notes, however, that Section 2 of the UPC permits the Operations Committee to entertain a request for a delayed settlement date, under the Committee's authority to issue rulings concerning the operation of the Code, if final settlement on the 90th day is not possible due to extraordinary circumstances beyond the member's control.
Questions concerning this Notice may be directed to Elliott R. Curzon, Senior Attorney, Office of General Counsel, at (202) 728-8451.
Uniform Practice Code
Settlement of Syndicate Accounts
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