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  • ARTICLE III QUALIFICATIONS OF MEMBERS AND ASSOCIATED PERSONS

    • Persons Eligible to Become Members and Associated Persons of Members

      Sec. 1.  (a) Any registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer authorized to transact, and whose regular course of business consists in actually transacting, any branch of the investment banking or securities business in the United States, under the laws of the United States, shall be eligible for membership in the Corporation, except such registered brokers, dealers, or municipal securities brokers or dealers, or government securities brokers or dealers which are excluded under the provisions of Section 3.
      (b) Any person shall be eligible to become an associated person of a member, except such persons who are excluded under the provisions of Section 3.
      Amended by SR-NASD-2007-023 eff. July 30, 2007.
      Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • Authority of Board to Adopt Qualification Requirements

      Sec. 2.  (a) The Board shall have authority to adopt rules and regulations applicable to applicants for membership, members, and persons associated with applicants or members establishing specified and appropriate standards with respect to the training, experience, competence, and such other qualifications as the Board finds necessary or desirable, and in the case of an applicant for membership or a member, standards of financial responsibility and operational capability.
      (b) In establishing and applying such standards, the Board may classify members and persons associated with such members, taking into account relevant matters, including the nature, extent, and type of business being conducted and of securities sold, dealt in, or otherwise handled. The Board may specify that all or any portion of such standards shall be applicable to any such class and may require the persons in any such class to be registered with the Corporation.
      (c) The Board may from time to time make changes in such rules, regulations, and standards as it deems necessary or appropriate.
      Amended by SR-NASD-2007-023 eff. July 30, 2007.
      Amended by SR-NASD-97-71 eff. Jan. 15, 1998.

    • Ineligibility of Certain Persons for Membership or Association

      Sec. 3.  (a) No registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer shall be admitted to membership, and no member shall be continued in membership, if such broker, dealer, municipal securities broker or dealer, government securities broker or dealer, or member fails or ceases to satisfy the qualification requirements established under Section 2, if applicable, or if such broker, dealer, municipal securities broker or dealer, government securities broker or dealer, or member is or becomes subject to a disqualification under Section 4, or if such member fails to comply with the requirement that all forms filed pursuant to these By-Laws be filed via electronic process or such other process as the Corporation may prescribe.
      (b) No person shall become associated with a member, continue to be associated with a member, or transfer association to another member, if such person fails or ceases to satisfy the qualification requirements established under Section 2, if applicable, or if such person is or becomes subject to a disqualification under Section 4; and no broker, dealer, municipal securities broker or dealer, or government securities broker or dealer shall be admitted to membership, and no member shall be continued in membership, if any person associated with it is ineligible to be an associated person under this subsection.
      (c) If it deems appropriate, the Board, upon notice and opportunity for a hearing, may cancel the membership of a member if it becomes ineligible for continuance in membership under subsection (a), may suspend or bar a person from continuing to be associated with any member if such person is or becomes ineligible for association under subsection (b), and may cancel the membership of any member who continues to be associated with any such ineligible person.
      (d) Any member that is ineligible for continuance in membership may file with the Board an application requesting relief from the ineligibility pursuant to the Rules of the Corporation. A member may file such application on its own behalf and on behalf of a current or prospective associated person. The Board may, in its discretion, approve the continuance in membership, and may also approve the association or continuance of association of any person, if the Board determines that such approval is consistent with the public interest and the protection of investors. Any approval hereunder may be granted unconditionally or on such terms and conditions as the Board considers necessary or appropriate. In the exercise of the authority granted hereunder, the Board may conduct such inquiry or investigation into the relevant facts and circumstances as it, in its discretion, considers necessary to its determination, which, in addition to the background and circumstances giving rise to the failure to qualify or disqualification, may include the proposed or present business of a member and the conditions of association of any current or prospective associated person.
      (e) An application filed under subsection (d) shall not foreclose any action which the Board is authorized to take under subsection (c) until approval has been granted.
      (f) Approval by the Board of an application made under subsection (d) shall be subject to whatever further action the Commission may take pursuant to authority granted to the Commission under the Act.
      (g) The Board may delegate its authority under this Section in a manner not inconsistent with the Delegation Plan.
      Amended by SR-NASD-2007-023 eff. July 30, 2007.
      Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
      Amended by SR-NASD-96-21 eff. July 15, 1996.
      Amended by SR-NASD-95-45 eff. Nov. 8, 1995.

      Selected Notices: 86-85, 87-13, 88-96, 95-61.

    • Definition of Disqualification

      Sec. 4.  A person is subject to a "disqualification" with respect to membership, or association with a member, if such person is subject to any "statutory disqualification" as such term is defined in Section 3(a)(39) of the Act.
      Amended by SR-NASD-2007-023 eff. July 30, 2007.
      Amended by SR-NASD-97-71 eff. Jan. 15, 1998.
      Amended by SR-NASD-96-21 eff. July 15, 1996.
      Amended by SR-NASD-95-45 eff. Nov. 8, 1995.

      Selected Notices: 86-85, 87-13, 88-96, 95-61.