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| SEC
Approves Notice Requirement
for Reliance on Limited Size and Resource Exemption The SEC has approved the NASD's rule request requiring any member firm electing to utilize the Limited Size and Resources exemption to NASD Rule 3012 (the "Exemption") to file annual electronic notification with the NASD. The filings will have to be done on the new NASD electronic filing platform that is currently being rolled out. In addition, the NASD will issue a Notice to Members by January 14, 2006, which will set forth the effective date of the rule (which will be 30 days from the day the notice to members is issued by the NASD) and the filing process to be utilized for electronic submission. Under the rule, member firms will have to file electronically within 30 days of the effective date of the rule, and they will also have to file annually to reconfirm their reliance on the Exemption, and/or when they cease relying on it. This new rule is not a surprise to member firms, as it was approved to satisfy the SEC's requirement that was set forth in the original approval of Rule 3012 that the SEC was to be notified by the NASD of all firms relying on the Exemption. It was originally anticipated that firms would utilize the Exemption for the requirement to review the customer account activity of branch and production managers [Rule 3012(a)(2)(A)] and the requirement to have heightened supervision over the activities of production managers that are responsible for generating 20% or more of the revenue for business units supervised by their supervisor [Rule 3012(a)(2)(C)]. |
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For further information regarding the Exemption, notice or filing process, please call Michael Schaps, Vice President Broker/Dealer Division 281-863-6116 |
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