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FINRA Manual
Corporate Organization Notices
1992
92-65 SEC Approval of Amendments Concerning the Exclusion of Class-Action Matters From Arbitration Proceedings and Requiring That Predispute Arbitration Agreements Include a Notice That Class-Action Matters May Not Be Arbitrated
92-59 SEC Approval of Amendments Requiring Prefiling of Advertisements for Collateralized Mortgage Obligations
92-58 SEC Approval of Amendment to Section 13, Schedule E to the NASD By-Laws Effective October 1, 1992
92-57 Proposed Amendments to Schedule E to the NASD By-Laws Regarding Potential Conflicts of Interest; Last Voting Date: December 21, 1992
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
92-51 SEC Approval of Amendments Relating to "When, as and if Issued" and "When, As and if Distributed" Contracts; Effective November 2, 1992
92-50 Procedures Regarding Securities and Exchange Commission Rule 15c2-11 and Schedule H, Section 4 of the NASD® By-Laws
92-41 SEC Approval of Amendments to Article III, Section 26 of the NASD Rules of Fair Practice Regarding Limitations on Mutual Fund Asset-Based Sales Charges; Effective July 7, 1993
92-38 SEC Adoption of Penny-Stock Disclosure Rules Under the Securities Enforcement Remedies and Penny Stock Reform Act of 1990
92-37 Proposed Amendment to Article III, Section 21 of the Rules of Fair Practice to Require Predispute Arbitration Agreements to Include a Notice That Class-Action Matters May Not Be Arbitrated; Last Voting Date: August 21, 1992
92-36 Proposed Amendment to Article III, Section 35 of the NASD's Rules of Fair Practice And Section 8 of the NASD's Government Securities Rules to Require Members to Prefile Advertisements for Collateralized Mortgage Obligations; Last Voting Date: Aug
92-32 Request for Comments on Proposed Amendment to the Rules of Fair Practice Relating to the Respective Obligations and Supervisory Responsibilities of Introducing and Clearing Firms; Last Date for Comments: July 22, 1992
92-31 SEC Approval of Amendments Relating to the Contingent Suspension of Members and Associated Persons
92-30 Proposed Amendment to Rules of Fair Practice to Require Members to Send Periodic Statements of Account to Customers; Last Voting Date: July 22, 1992
92-28 SEC Approval of Corporate Financing Rule and Code of Procedure for Corporate Financing and Direct Participation Program Matters
92-25 Proposed Amendment to Article III, Section 15 of the NASD Rules of Fair Practice Re: Exemption for Negative-Response Letters Used to Facilitate Certain Bulk Exchanges of Money Market Mutual Funds
92-20 Sale of Direct Participation Program Debt Instruments by Limited Principals and Representatives; SEC Approval of Amendments to Parts II and III of Schedule C To the NASD's By-Laws
92-19 Retention of Jurisdiction; SEC Approval of Amendments to Article III, Section 5 and Article IV, Sections 3 and 4 of the Association's By-Laws, and Article IV, Section V Of the Association's Rules of Fair Practice
92-18 SEC Approval of Amendments to the Definition of the Term "Branch Office" in Article III, Section 27 of the Rules of Fair Practice
92-17 Adoption of Amendments to Interpretation of the Board of Governors — Forwarding Of Proxy and Other Materials, Article III, Section 1 of the NASD Rules of Fair Practice Re: Forwarding Proxy Material on the Request of Stockholders
92-10 Approval of Amendments to Article III, Section 3 of the NASD By-Laws Regarding NASD Member Requirement to Appoint One Executive Representative Responsible For Voting and Acting for the Member in All Affairs Relating to the NASD
92-8 Proposed Amendment to Rules of Fair Practice, Article III, New Section 46: Short-Sale Rule for Nasdaq/NMS Securities and New Section 47: Primary Nasdaq Market Makers; Last Voting Date: March 13, 1992
92-4 Revision to the Investment Company Products/Variable Contracts Limited Principal Examination (Series 26)
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92-11 Fees and Charges for Services
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EXECUTIVE SUMMARY
Members are reminded of their obligation that all fees and charges for services must be reasonable and that adequate prior notice be given to customers.
DISCUSSION
Article III, Section 3 of the Rules of Fair Practice specifies that charges for services performed by members "shall be reasonable and not unfairly discriminatory between customers." In addition to being reasonable in nature, the NASD believes that customers must be provided with adequate notice prior to the member's implementation or change of a service fee. Members should provide written notification to customers of all service charges when accounts are opened, and customers also should be provided with written notification at least 30 days prior to the implementation or change of any service charge. Failure to do so could be construed as conduct inconsistent with just and equitable principles of trade under Article III, Section 1 of the NASD Rules of Fair Practice.
In a related issue, the NASD is aware that some firms have been, or are contemplating, charging fees for the transfer of customer accounts through the Automated Customer Account Transfer System (ACATS), in addition to charging for non-ACATS transfers. ACATS was designed to expedite the transfer of customer accounts between participants in a registered clearing agency. The system was intended to alleviate the demands on member firms imposed by the manual processing of customer account transfer and thereby reduce costs. The NASD is concerned about members charging fees unrelated to actual costs for account transfers through ACATS. Moreover, the NASD believes it is not appropriate to charge fees to customers for involuntary account transfers through ACATS occasioned by circumstances beyond the customer's control.
Questions concerning this Notice may be directed to Samuel Luque, Associate Director, Financial Responsibility, at (202) 728-8472.
