# Self-Regulatory Organizations; Order Approving Proposed Rule Change and Notice of Filing and Order Granting Accelerated Approval to Amendment No. 2 to the Proposed Rule Change by the National Association of Securities Dealers, Inc. Relating to the Application of NASD Rules and Interpretive Materials to Exempted Securities; Corrections
In FR Document No. 01-19700, beginning on page 41283, column 3, for Tuesday, August 7, 2001, a sentence was incorrectly stated. Specifically, footnote 10 should be revised to delete references to National Association of Securities Dealers, Inc. (“NASD”) Rule 2440, “Fair Prices and Commissions,” and to IM-2440, “Mark-Up Policy.”
Footnote 10 is revised to read as follows:
<sub>10</sub>*See* Securities Exchange Act Release No. 37588 (August 20, 1996), 61 FR 44100 (August 27, 1996) (order approving File No. SR-NASD-95-39) (“1996 Order”). The 1996 Order approved the application of the following NASD rules to exempted securities, including government securities but not municipal securities: NASD Rule 2110, “Standards of Commercial Honor and Principles of Trade;” NASD Rule 2120, ”Use of Manipulative, Deceptive or Other Fraudulent Devices;” NASD Rule 2210, “Communications with the Public;” IM-2210-2, “Communications with the Public about Collateralized Mortgage Obligations;” IM-2210-2, “Communications with the Public about Variable Life Insurance and Variable Annuities;” IM-2210-3, “Use of Rankings in Investment Companies Advertisements and Sales Literature;” NASD Rule 2250, “Disclosure of Participation or Interest in Primary or Secondary Distribution;” NASD Rule 2270, “Disclosure of Financial Condition to Customers;” NASD Rule 2310, “Recommendations to Customers (Suitability);” IM-2310-2, “Fair Dealing with Customers;” IM-2310-3, “Suitability Obligations to Institutional Customers;” NASD Rule 2320, “Best Execution and Interpositioning;” NASD Rule 2330, “Customers' Securities or Funds;” IM-2330, “Segregation of Customers' Securities;” NASD Rule 2340, “Customer Account Statements;” NASD Rule 2430, “Charges for Services Performed;” NASD Rule 2450, “Installment or Partial Sales;” NASD Rule 2510, “Discretionary Accounts;” NASD Rule 2520, “Margin Accounts;” NASD Rule 2521, “Margin Requirements—Exception for Certain Members” (formerly NASD Rule 2520(a); NASD Rule 2522, “Definitions Related to Options, Currency Warrants Currency Index Warrants and Stock Index Warrants Transactions” (formerly NASD Rule 2520(b); NASD Rule 2770, “Disclosure of Price in Selling Agreements” (applicable only to traditional underwriting arrangements); NASD Rule 2780, “Solicitation of Purchases on an Exchange to Facilitate a Distribution of Securities;” NASD Rule 2910, “Disclosure of Financial Condition to Other Members;” NASD Rule 3010, “Supervision;” NASD Rule 3020, “Fidelity Bonds;” NASD Rule 3030, “Outside Business Activities of an Associated Person;” NASD Rule 3040, “Private Securities Transactions of an Associated Person;” NASD Rule 3050, “Transactions for or by Associated Persons;” NASD Rule 3060, “Influencing or Rewarding Employees of Others;” NASD Rule 3070, “Reporting Requirements;” NASD Rule 3120, “Use of Information Obtained in a Fiduciary Capacity;” NASD Rule 3110, “Books and Records;” IM-3110, “Customer Account Information;” NASD Rule 3130, “Regulation of Members Experiencing Financial and/or Operational Difficulties;” IM-3130, “Restrictions on a Member's Activity;” NASD Rule 3131, “Regulation of Activities of Section 15C Members Experiencing Financial and/or Operational Difficulties;” NASD Rule 3140, “Approval of Change in Exempt Status under SEC Rule 15c3-3;” NASD Rule 3230, “Clearing Agreements;” NASD Rule 3310, “Publication of Transactions and Quotations;” IM-3310, “Manipulative and Deceptive Quotations;” NASD Rule 3320, “Offers at Stated Prices;” IM-3320, “Firmness of Quotations;” NASD Rule 3330, “Payment Designed to Influence Market Prices, Other than Paid Advertising;” NASD Rule 8110, “Availability to Customers of Certificate, By-Laws, and Rules;” NASD Rule 8120, “Complaints by Public Against Members for Violations of Rules;” NASD Rule 8130, “Complaints by District Business Conduct Committees;” NASD Rule 8140, “Complaints by the Board of Governors;” NASD Rule 8210, “Reports and Inspections of Books for Purpose of Investigating Complaints;” NASD Rule 8220, “Suspension of Members for Failure to Furnish Information Duly Requested;” NASD Rule 8310, “Sanctions for Violation of the Rules;” IM-8310-1, “Effect of a Suspension, Revocation, or Bar;” IM-8310-2, “Release of Disciplinary Information;” NASD Rule 8320, “Payment of Fines, Other Monetary Sanctions, or Costs;” and NASD Rule 8330, “Cost of Proceedings.” As discussed more fully below, Amendment No. 2 clarifies NASD Regulation's reasons for including NASD Rules 2521, 2522, 2910, 8220 (which was expanded to include current NASD Rules 8221 through 8227), and IM-8310-2 in its list of rules and interpretative materials applicable to exempted securities, including government securities, other than municipal securities. *See* Amendment No. 2, *supra* note 4.
In addition, in FR Document No. 01-19700, beginning on page 41284, column 1, a sentence in footnote 12 was incorrectly stated. Specifically, footnote 12 should be changed to delete references to NASD Rule 2300 and to IM-8310 and to add a reference to IM-2522.
Footnote 12 is revised to read as follows:
<sub>12</sub> Specifically, NASD Rule 0116(b) states that, unless otherwise indicated within a particular provision, the following NASD rules and interpretative materials apply to transactions and business activities relating to exempted securities but not municipal securities, conducted by members and associated persons: 2110, 2120, 2210, IM-2210-1, IM-2210-2, IM-2210-3, 2250, 2270, 2310, IM-2310-2, IM-2310-3, 2320, 2330, IM-2330, 2340, 2430, 2450, 2510, 2520, 2521, 2522, IM-2522, 2770, 2780, 2820(g), 2910, 3010, 3020, 3030, 3040, 3050, 3060, 3070, 3110, IM-3110, 3120, 3130, IM-3130, 3131, 3140, 3230, 3310, IM-3310, 3320, IM-3320, 3330, 8110, 8120, 8210, 8221, 8222, 8223, 8224, 8225, 8226, 8227, 8310, IM-8310-1, IM-8310-2, 8320, and 8330. *See* Amendment No. 2, *supra* note 4.
For the Commission, by the Division of Market Regulation, pursuant to delegated authority. [^1]
[^1] 17 CFR 200.30-3(a)(12).
Margaret H. McFarland,
Deputy Secretary.