nonstock membership organization formed under the Securities Act of 1934 to act as primary regulator of securities sold in the over-the-counter market. A self-regulatory organization, NASD issues the rules of fair practice governing practices by broker-dealer firms in the OTC market. Its members include securities broker-dealers and underwriters other than commercial banks. The NASD governs its members in trading policies and procedures, listing of new issues, and customer relations. It also licenses broker-dealers. Bankers who accept customer orders in discount brokerage operations must pass an NASD qualifying examination, and have a NASD Series 7 brokerage license. The NASD also issues suitability guidelines regulating broker-dealer sales of mutual funds and other investment securities.
organization of stock brokerage firms dealing in the Over The Counter (OTC) market. Operating under the supervision of the SEC , the NASD's basic purposes are to: (1) standardize practices in the field; (2) establish high moral and ethical standards in securities trading; (3) provide a representative body to consult with the government and investors on matters of common interest; (4) establish and enforce fair and equitable rules of securities trading; and (5) establish a disciplinary body capable of enforcing the above provisions.
nonprofit organization formed under the joint sponsorship of the Investment Bankers' Conference and the Securities and Exchange Commission to comply with the maloney act. NASD members include virtually all investment banking houses and firms dealing in the Over The Counter market. Operating under the supervision of the SEC, the NASD's basic purposes are to (1) standardize practices in the field, (2) establish high moral and ethical standards in securities trading, (3) provide a representative body to consult with the government and investors on matters of common interest, (4) establish and enforce fair and equitable rules of securities trading, and (5) establish a disciplinary body capable of enforcing the above provisions. The NASD also requires members to maintain quick assets in excess of current liabilities at all times. Periodic examinations and audits are conducted to ensure a high level of solvency and financial integrity among members. A special Investment Companies Department is concerned with the problems of investment companies and has the responsibility of reviewing companies' sales literature in that segment of the securities industry.
organization of brokers and securities dealers in the over-the-counter market operating under the auspices of the Securities and Exchange Commission (SEC). Its purpose is to enforce, on a self-regulating basis, the rules of the SEC, which are designed to protect investors against fraud and market manipulation of stocks. The NASD also publishes quotations of both national and regional stocks. Insurance agents selling variable life insurance, variable annuities and mutual funds are required to be licensed by the NASD.
