By-Laws of the Corporation
When used in these By-Laws, unless the context otherwise requires, the term:
(a) "Act" means the Securities Exchange Act of 1934, as amended;
(b) "bank" means (1) a banking institution organized under the laws of the United States, (2) a member bank of the Federal Reserve System, (3) any other banking institution, whether incorporated or not, doing business under the laws of any State or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency pursuant to the first section of Public Law 87-722 (12 U.S.C. § 92a), and which is supervised and examined by a State or Federal authority having supervision over banks, and which is not operated for the purpose of evading the provisions of the Act, and (4) a receiver, conservator, or other liquidating agent of any institution or firm included in clauses (1), (2), or (3) of this subsection;
(c) "Board" means the Board of Governors of the Corporation;
(d) "branch office" means an office defined as a branch office in the Rules of the Corporation;
(e) "broker" means any individual, corporation, partnership, association, joint stock company, business trust, unincorporated organization, or other legal entity engaged in the business of effecting transactions in securities for the account of others, but does not include a bank;
(f) "Closing" means the closing of the consolidation of certain member firm regulatory functions of NYSE Regulation, Inc. and the Corporation;
(g) "Commission" means the Securities and Exchange Commission;
(h) "controlling" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract or otherwise. A person who is the owner of 20% or more of the outstanding voting stock of any corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity, in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall not apply where such person holds voting stock, in good faith, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control of such entity;
(i) "Corporation" means the National Association of Securities Dealers, Inc. or any future name of this entity;
(j) "day" means calendar day;
(k) "dealer" means any individual, corporation, partnership, association, joint stock company, business trust, unincorporated organization, or other legal entity engaged in the business of buying and selling securities for such individual's or entity's own account, through a broker or otherwise, but does not include a bank, or any person insofar as such person buys or sells securities for such person's own account, either individually or in some fiduciary capacity, but not as part of a regular business;
(l) "Delegation Plan" means the "Plan of Allocation and Delegation of Functions by NASD to Subsidiaries" as approved by the Commission, and as amended from time to time;
(m) "district" means a district established by the NASD Regulation Board pursuant to the NASD Regulation By-Laws;
(n) "Floor Member Governor" means a member of the Board appointed as such who is a person associated with a member (or a firm in the process of becoming a member) which is a specialist or floor broker on the New York Stock Exchange trading floor;
(o) "government securities broker" shall have the same meaning as in Section 3(a)(43) of the Act except that it shall not include financial institutions as defined in Section 3(a)(46) of the Act;
(p) "government securities dealer" shall have the same meaning as in Section 3(a)(44) of the Act except that it shall not include financial institutions as defined in Section 3(a)(46) of the Act;
(q) "Governor" means a member of the Board;
(r) "Independent Dealer/Insurance Affiliate Governor" means a member of the Board appointed as such who is a person associated with a member which is an independent contractor financial planning member firm or an insurance company, or an affiliate of such a member;
(s) "Industry Director" means a Director of the NASD Regulation Board or NASD Dispute Resolution Board (excluding the Presidents) who: (1) is or has served in the prior year as an officer, director (other than as an independent director), employee or controlling person of a broker or dealer, or (2) has a consulting or employment relationship with or provides professional services to a self regulatory organization registered under the Act, or has had any such relationship or provided any such services at any time within the prior year;
(t) "Industry Governor" or "Industry committee member" means the Floor Member Governor, the Independent Dealer/Insurance Affiliate Governor and the Investment Company Affiliate Governor and any other Governor (excluding the Chief Executive Officer of the Corporation and, during the Transitional Period, the Chief Executive Officer of NYSE Regulation, Inc.) or committee member who: (1) is or has served in the prior year as an officer, director (other than as an independent director), employee or controlling person of a broker or dealer, or (2) has a consulting or employment relationship with or provides professional services to a self regulatory organization registered under the Act, or has had any such relationship or provided any such services at any time within the prior year;
(u) "investment banking or securities business" means the business, carried on by a broker, dealer, or municipal securities dealer (other than a bank or department or division of a bank), or government securities broker or dealer, of underwriting or distributing issues of securities, or of purchasing securities and offering the same for sale as a dealer, or of purchasing and selling securities upon the order and for the account of others;
(v) "Investment Company" means an "investment company" as such term is defined in The Investment Company Act of 1940, as amended;
(w) "Investment Company Affiliate Governor" means a member of the Board appointed as such who is a person associated with a member which is an Investment Company or an affiliate of such a member;
(x) "Joint Public Governor" means the one Public Governor to be appointed as such by the Board of Directors of NYSE Group, Inc. and the Board in office prior to the Closing jointly;
(y) "Large Firm" means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has 500 or more registered persons;
(z) "Large Firm Governor" means a member of the Board to be elected by Large Firm members, provided, however, that in order to be eligible to serve, a Large Firm Governor must be an Industry Governor and must be registered with a member which is a Large Firm member;
(aa) "Large Firm Governor Committee" means a committee of the Board comprised of all of the Large Firm Governors;
(bb) "Lead Governor" means a member of the Board elected as such by the Board, provided, however, that any member of the Board who is concurrently serving as a member of the Board of Directors of NYSE Group, Inc. shall not be eligible to serve as the Lead Governor;
(cc) "Mid-Size Firm" means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least 151 and no more than 499 registered persons;
(dd) "Mid-Size Firm Governor" means a member of the Board to be elected by Mid-Size Firm members, provided, however, that in order to be eligible to serve, a Mid-Size Firm Governor must be an Industry Governor and must be registered with a member which is a Mid-Size Firm member;
(ee) "member" means any broker or dealer admitted to membership in the Corporation;
(ff) "municipal securities" means securities which are direct obligations of, or obligations guaranteed as to principal or interest by, a State or any political subdivision thereof, or any agency or instrumentality of a State or any political subdivision thereof, or any municipal corporate instrumentality of one or more States, or any security which is an industrial development bond as defined by Section 3(a)(29) of the Act;
(gg) "municipal securities broker" means a broker, except a bank or department or division of a bank, engaged in the business of effecting transactions in municipal securities for the account of others;
(hh) "municipal securities dealer" means any person, except a bank or department or division of a bank, engaged in the business of buying and selling municipal securities for such person's own account, through a broker or otherwise, but does not include any person insofar as such person buys or sells securities for such person's own account either individually or in some fiduciary capacity, but not as a part of a regular business;
(ii) "NASD Dispute Resolution" means NASD Dispute Resolution, Inc. or any future name of this entity;
(jj) "NASD Group Committee" means a committee of the Board comprised of the five Public Governors and the Independent Dealer/Insurance Affiliate Governor appointed as such by the Board in office prior to Closing, and the Small Firm Governors which were nominated for election as such by the Board in office prior to Closing, and in each case their successors;
(kk) "NASD Public Governors" means the five Public Governors to be appointed as such by the Board in office prior to the Closing effective as of Closing;
(ll) "NASD Regulation" means NASD Regulation, Inc. or any future name of this entity;
(mm) "NASD Regulation Board" means the Board of Directors of NASD Regulation;
(nn) "National Adjudicatory Council" means a body appointed pursuant to Article V of the NASD Regulation By-Laws;
(oo) "Nominating Committee" means the Nominating Committee appointed pursuant to Article VII, Section 9 of these By-Laws;
(pp) "NYSE Group Committee" means a committee of the Board comprised of the five Public Governors and the Floor Member Governor appointed as such by the Board of Directors of NYSE Group, Inc., and the Large Firm Governors which were nominated for election as such by the Board of Directors of NYSE Group, Inc., and in each case their successors;
(qq) "NYSE Public Governors" shall mean the five Public Governors to be appointed as such by the Board of Directors of NYSE Group, Inc. effective as of Closing;
(rr) "person associated with a member" or "associated person of a member" means: (1) a natural person who is registered or has applied for registration under the Rules of the Corporation; (2) a sole proprietor, partner, officer, director, or branch manager of a member, or other natural person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities business who is directly or indirectly controlling or controlled by a member, whether or not any such person is registered or exempt from registration with the Corporation under these By-Laws or the Rules of the Corporation; and (3) for purposes of Rule 8210, any other person listed in Schedule A of Form BD of a member;
(ss) "Public Director" means a Director of the NASD Regulation Board or NASD Dispute Resolution Board who is not an Industry Director and who otherwise has no material business relationship with a broker or dealer or a self regulatory organization registered under the Act (other than serving as a public director of such a self regulatory organization);
(tt) "Public Governor" or "Public committee member" means any Governor or committee member who is not the Chief Executive Officer of the Corporation or, during the Transitional Period, the Chief Executive Officer of NYSE Regulation, Inc., who is not an Industry Governor and who otherwise has no material business relationship with a broker or dealer or a self regulatory organization registered under the Act (other than serving as a public director of such a self regulatory organization);
(uu) "registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer" means any broker, dealer, municipal securities broker or dealer, or government securities broker or dealer which is registered with the Commission under the Act;
(vv) "Rules of the Corporation" or "Rules" means the numbered rules set forth in the manual of the Corporation beginning with the Rule 0100 Series, as adopted by the Board pursuant to these By-Laws, as hereafter amended or supplemented;
(ww) "Small Firm" means any broker or dealer admitted to membership in the Corporation which, at the time of determination, has at least 1 and no more than 150 registered persons;
(xx) "Small Firm Governor" means a member of the Board to be elected by Small Firm members, provided, however, that in order to be eligible to serve, a Small Firm Governor must be registered with a member which is a Small Firm member and must be an Industry Governor;
(yy) "Small Firm Governor Committee" means a committee of the Board comprised of all the Small Firm Governors; and
(zz) "Transitional Period" means the period commencing on the date of the Closing and ending on the third anniversary of the date of the Closing.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-2004-110 eff. Dec. 31, 2004. Amended by SR-NASD-2001-06 eff. May 8, 2001. Amended by SR-NASD-99-35 eff. Dec. 1, 1999. Amended by SR-NASD-98-56 eff. Oct. 30, 1998. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-95-39 eff. Aug 20, 1996. Amended by SR-NASD-94-64 eff. Feb. 9, 1995. Amended eff. Mar. 9, 1988 and Sept. 4, 1990. Selected Notices: 87-14, 87-37, 87-41, 88-51, 94-52, 99-95. |
Sec. 1. The address of the registered office of the Corporation in the State of Delaware and the name of the registered agent at such address shall be: The Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801. The Corporation also may have offices at such other places both within and without the State of Delaware as the Board may from time to time designate or the business of the Corporation may require.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. |
Sec. 2. In the manner permitted by law, the Board or the registered agent may change the address of the Corporation's registered office in the State of Delaware and the Board may make, revoke, or change the designation of the registered agent.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
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. |
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. |
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. |
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. |
Sec. 1. (a) Application for membership in the Corporation, properly signed by the applicant, shall be made to the Corporation via electronic process or such other process as the Corporation may prescribe, on the form to be prescribed by the Corporation, and shall contain:
(1) an agreement to comply with the federal securities laws, the rules and regulations thereunder, the rules of the Municipal Securities Rulemaking Board and the Treasury Department, the By-Laws of the Corporation, NASD Regulation, or NASD Dispute Resolution, the Rules of the Corporation, and all rulings, orders, directions, and decisions issued and sanctions imposed under the Rules of the Corporation;
(2) an agreement to pay such dues, assessments, and other charges in the manner and amount as from time to time shall be fixed pursuant to the By-Laws of the Corporation, Schedules to the By-Laws of the Corporation, and the Rules of the Corporation; and
(3) such other reasonable information with respect to the applicant as the Corporation may require.
(b) Any application for membership received by the Corporation shall be processed in the manner set forth in the Rules of the Corporation.
(c) Each applicant and member shall ensure that its membership application with the Corporation is kept current at all times by supplementary amendments via electronic process or such other process as the Corporation may prescribe to the original application. Such amendments to the application shall be filed with the Corporation not later than 30 days after learning of the facts or circumstances giving rise to the amendment.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-96-21 eff. July 15, 1996. Amended by SR-NASD-94-14 eff. July 20, 1994. Selected Notice: 94-22. |
Sec. 2. (a) No person or firm shall be admitted to or continued in membership in the Corporation having a name that is identical to the name of another member appearing on the membership roll of the Corporation or a name so similar to any such name as to tend to confuse or mislead.
(b) No member may change its name without prior approval of the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 3. Each member shall appoint and certify to the Secretary of the Corporation one "executive representative" who shall represent, vote, and act for the member in all the affairs of the Corporation, except that other executives of a member may also hold office in the Corporation, serve on the Board or committees appointed under Article IX, Section 1 or otherwise take part in the affairs of the Corporation. A member may change its executive representative upon giving notice thereof via electronic process or such other process as the Corporation may prescribe to the Secretary, or may, when necessary, appoint, by notice via electronic process to the Secretary, a substitute for its executive representative. An executive representative of a member or a substitute shall be a member of senior management and registered principal of the member. Not later than January 1, 1999, each executive representative shall maintain an Internet electronic mail account for communication with the Corporation and shall update firm contact information via the NASD Regulation Web Site or such other means as prescribed by the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-92 eff. May 5, 1998. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-21 eff. July 15, 1996. Amended eff. Dec. 23, 1991. Selected Notice: 92-10. |
Sec. 4. The Secretary of the Corporation shall keep a currently accurate and complete membership roll, containing the name and address of each member, and the name and address of the executive representative of each member. In any case where a membership has been terminated, such fact shall be recorded together with the date on which the membership ceased. The membership roll of the Corporation shall at all times be available to all members of the Corporation, to all governmental authorities, and to the general public.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 5. Membership in the Corporation may be voluntarily terminated only by formal resignation. Resignations of members must be filed via electronic process or such other process as the Corporation may prescribe and addressed to the Corporation. Any member may resign from the Corporation at any time. Such resignation shall not take effect until 30 days after receipt thereof by the Corporation and until all indebtedness due the Corporation from such member shall have been paid in full and so long as any complaint or action is pending against the member under the Rules of the Corporation. The Corporation, however, may in its discretion declare a resignation effective at any time.
| 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-96-20 eff. July 11, 1996. |
Sec. 6. A resigned member or a member that has had its membership canceled or revoked shall continue to be subject to the filing of a complaint under the Rules of the Corporation based upon conduct which commenced prior to the effective date of the member's resignation from the Corporation or the cancellation or revocation of its membership. Any such complaint, however, shall be filed within two years after the effective date of resignation, cancellation, or revocation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended eff. Apr. 15, 1992. Selected Notice: 92-19. |
Sec. 7. (a) Except as provided hereinafter, no member of the Corporation may transfer its membership or any right arising therefrom and the membership of a corporation, partnership, or any other business organization which is a member of the Corporation shall terminate upon its liquidation, dissolution, or winding up, and the membership of a sole proprietor which is a member shall terminate at death, provided that all obligations of membership under the By-Laws and the Rules of the Corporation have been fulfilled.
(b) The consolidation, reorganization, merger, change of name, or similar change in any corporate member shall not terminate the membership of such corporate member provided that the member or surviving organization, if any, shall be deemed a successor to the business of the corporate member, and the member or the surviving organization shall continue in the investment banking and securities business, and shall possess the qualifications for membership in the Corporation. The death, change of name, withdrawal of any partner, the addition of any new partner, reorganization, consolidation, or any change in the legal structure of a partnership member shall not terminate the membership of such partnership member provided that the member or surviving organization, if any, shall be deemed a successor to the business of the partnership member, and the member or surviving organization shall continue in the investment banking and securities business and shall possess the qualifications for membership in the Corporation. If the business of any predecessor member is to be carried on by an organization deemed to be a successor organization by the Corporation, the membership of such predecessor member shall be extended to the successor organization subject to the notice and application requirements of the Rules of the Corporation and the right of the Corporation to place restrictions on the successor organization pursuant to the Rules of the Corporation; otherwise, any surviving organization shall be required to satisfy all of the membership application requirements of these By-Laws and the Rules of the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 8. (a) Each branch office of a member of the Corporation shall be registered with and listed upon the membership roll of the Corporation, and shall pay such dues, assessments, and other charges as shall be fixed from time to time by the Board pursuant to Article VI.
(b) Each member of the Corporation shall promptly advise the Corporation via electronic process or such other process as the Corporation may prescribe of the opening, closing, relocation, change in designated supervisor, or change in designated activities of any branch office of such member not later than 30 days after the effective date of such change.
| 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-94-64 eff. Feb. 9, 1995. Amended eff. Apr. 15, 1992. |
Sec. 1. No member shall permit any person associated with the member to engage in the investment banking or securities business unless the member determines that such person satisfies the qualification requirements established under Article III, Section 2 and is not subject to a disqualification under Article III, Section 4.
| Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 2. (a) Application by any person for registration with the Corporation, properly signed by the applicant, shall be made to the Corporation via electronic process or such other process as the Corporation may prescribe, on the form to be prescribed by the Corporation and shall contain:
(1) an agreement to comply with the federal securities laws, the rules and regulations thereunder, the rules of the Municipal Securities Rulemaking Board and the Treasury Department, the By-Laws of the Corporation, NASD Regulation, and NASD Dispute Resolution, the Rules of the Corporation, and all rulings, orders, directions, and decisions issued and sanctions imposed under the Rules of the Corporation; and
(2) such other reasonable information with respect to the applicant as the Corporation may require.
(b) The Corporation shall not approve an application for registration of any person who is not eligible to be an associated person of a member under the provisions of Article III, Section 3.
(c) Every application for registration filed with the Corporation shall be kept current at all times by supplementary amendments via electronic process or such other process as the Corporation may prescribe to the original application. Such amendment to the application shall be filed with the Corporation not later than 30 days after learning of the facts or circumstances giving rise to the amendment. If such amendment involves a statutory disqualification as defined in Section 3(a)(39) and Section 15(b)(4) of the Act, such amendment shall be filed not later than ten days after such disqualification occurs.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-21 eff. July 15, 1996. |
Notification by Member to the Corporation and Associated Person of Termination; Amendments to Notification
Sec. 3. (a) Following the termination of the association with a member of a person who is registered with it, such member shall, not later than 30 days after such termination, give notice of the termination of such association to the Corporation via electronic process or such other process as the Corporation may prescribe on a form designated by the Corporation, and concurrently shall provide to the person whose association has been terminated a copy of said notice as filed with the Corporation. A member that does not submit such notification and provide a copy to the person whose association has been terminated, within the time period prescribed, shall be assessed a late filing fee as specified by the Corporation. Termination of registration of such person associated with a member shall not take effect so long as any complaint or action under the Rules of the Corporation is pending against a member and to which complaint or action such person associated with a member is also a respondent, or so long as any complaint or action is pending against such person individually under the Rules of the Corporation. The Corporation, however, may in its discretion declare the termination effective at any time.
(b) The member shall notify the Corporation via electronic process or such other process as the Corporation may prescribe by means of an amendment to the notice filed pursuant to subsection (a) in the event that the member learns of facts or circumstances causing any information set forth in said notice to become inaccurate or incomplete. Such amendment shall be filed with the Corporation via electronic process or such other process as the Corporation may prescribe and a copy provided to the person whose association with the member has been terminated not later than 30 days after the member learns of the facts or circumstances giving rise to the amendment.
| 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 eff. June 12, 1989 and Apr. 15, 1992. |
Sec. 4. (a) A person whose association with a member has been terminated and is no longer associated with any member of Corporation or a person whose registration has been revoked or canceled shall continue to be subject to the filing of a complaint under the Corporation Rules based upon conduct that commenced prior to the termination, revocation, or cancellation or upon such person's failure, while subject to the Corporation's jurisdiction as provided herein, to provide information requested by Corporation pursuant to the Corporation's Rules, but any such complaint shall be filed within:
(i) two years after the effective date of termination of registration pursuant to Section 3, provided, however that any amendment to a notice of termination filed pursuant to Section 3(b) that is filed within two years of the original notice that discloses that such person may have engaged in conduct actionable under any applicable statute, rule, or regulation shall operate to recommence the running of the two-year period under this subsection;
(ii) two years after the effective date of revocation or cancellation of registration pursuant to the Corporation's Rules ; or
(iii) in the case of an unregistered person, two years after the date upon which such person ceased to be associated with the member.
(b) A person whose association with a member has been terminated and is no longer associated with any member of Corporation shall continue to be subject to a proceeding to suspend, consistent with Article VI, Section 3 of the By-Laws, his or her ability to associate with a member based on such person's failure to comply with an arbitration award or a written and executed settlement agreement obtained in connection with an arbitration or mediation submitted for disposition pursuant to the Corporation's Rules, provided that such proceeding is instituted within two years after the date of entry of such award or settlement.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2003-069 eff. Sept. 9, 2004. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-94-64 eff. Feb. 9, 1995. Amended eff. Apr. 15, 1992. Selected Notices: 87-16, 88-67, 88-68, 89-57, 90-61, 91-60, 91-61, 94-52, 04-57. |
Sec. 1. The Corporation shall prepare an estimate of the funds necessary to defray reasonable expenses of administration in carrying on the work of the Corporation each fiscal year, and on the basis of such estimate, shall fix and levy the amount of admission fees, dues, assessments, and other charges to be paid by the members and issuers and any other persons using any facility or system which the Corporation, NASD Regulation, or NASD Dispute Resolution operates or controls. Fees, dues, assessments, and other charges shall be called and payable as determined by the Corporation from time to time; provided, however, that such admission fees, dues, assessments, and other charges shall be equitably allocated among members and issuers and any other persons using any facility or system which the Corporation operates or controls. The Corporation may from time to time make such changes or adjustments in such fees, dues, assessments, and other charges as it deems necessary or appropriate to assure equitable allocation of dues among members. In the event of termination of membership or the extension of any membership to a successor organization during any fiscal year for which an assessment has been levied and become payable, the Corporation may make such adjustment in the fees, dues, assessments, or other charges payable by any such member or successor organization or organizations during such fiscal years as it deems fair and appropriate in the circumstances.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 2. Each member, issuer, or other person shall promptly furnish all information or reports requested by the Corporation in connection with the determination of the amount of admission fees, dues, assessments, or other charges.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 3. (a) The Corporation after 15 days notice in writing, may suspend or cancel the membership of any member or the registration of any person in arrears in the payment of any fees, dues, assessments, or other charges or for failure to furnish any information or reports requested pursuant to Section 2 .
(b) The Corporation after 15 days notice in writing, may suspend or cancel the membership of any member or suspend from association with any member any person, for failure to comply with an award of arbitrators properly rendered pursuant to the Corporation's Rules, where a timely motion to vacate or modify such award has not been made pursuant to applicable law or where such a motion has been denied, or for failure to comply with a written and executed settlement agreement obtained in connection with an arbitration or mediation submitted for disposition pursuant to the Corporation's Rules.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2003-069 eff. Sept. 9, 2004. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-95-20 eff. Oct. 2, 1995. Amended eff. Aug. 29, 1991 and Jan. 26, 1993. Selected Notices: 91-24, 04-57. |
Sec. 4. Any membership or registration suspended or canceled under this Article may be reinstated by the Corporation upon such terms and conditions as it shall deem just; provided, however, that any applicant for reinstatement of membership or registration shall possess the qualifications required for membership or registration in the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended eff. Aug. 29, 1991. Selected Notices: 91-24, 93-16, 95-33. |
Sec. 5. The Corporation may delegate its authority under this Article in a manner not inconsistent with the Delegation Plan.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. (a) The Board shall be the governing body of the Corporation and, except as otherwise provided by applicable law, the Restated Certificate of Incorporation, or these By-Laws, shall be vested with all powers necessary for the management and administration of the affairs of the Corporation and the promotion of the Corporation's welfare, objects, and purposes. In the exercise of such powers, the Board shall have the authority to:
(i) adopt for submission to the membership, as hereinafter provided, such By-Laws and changes or additions thereto as it deems necessary or appropriate;
(ii) adopt such other Rules of the Corporation and changes or additions thereto as it deems necessary or appropriate, provided, however, that the Board may at its option submit to the membership any such adoption, change, or addition to such Rules;
(iii) make such regulations, issue such orders, resolutions, exemptions, interpretations, including interpretations of these By-Laws and the Rules of the Corporation, and directions, and make such decisions as it deems necessary or appropriate;
(iv) prescribe rules for the required or voluntary arbitration of controversies between members and between members and customers or others as it shall deem necessary or appropriate;
(v) establish rules and procedures to be followed by members in connection with the distribution of securities issued by members and affiliates thereof;
(vi) require all over-the-counter transactions in securities between members, other than transactions in exempted securities as defined in Section 3(a)(12) of the Act, to be cleared and settled through the facilities of a clearing agency registered with the Commission pursuant to the Act, which clears and settles such over-the-counter transactions in securities;
(vii) organize and operate automated systems to provide qualified subscribers with securities information and automated services. The systems may be organized and operated by a division or subsidiary company of the Corporation or by one or more independent firms under contract with the Corporation as the Board may deem necessary or appropriate. The Board may adopt rules for such automated systems, establish reasonable qualifications and classifications for members and other subscribers, provide qualification standards for securities included in such systems, require members to report promptly information in connection with securities included in such systems, and establish charges to be collected from subscribers and others;
(viii) require the prompt reporting by members of such original and supplementary trade data as the Board deems appropriate. Such reporting requirements may be administered by the Corporation, a division or subsidiary thereof, or a clearing agency registered under the Act; and
(ix) engage in any activities or conduct necessary or appropriate to carry out the Corporation's purposes under its Restated Certificate of Incorporation and the federal securities laws.
(b) In the event of the refusal, failure, neglect, or inability of any Governor to discharge such Governor's duties, or for any cause affecting the best interests of the Corporation the sufficiency of which the Board shall be the sole judge, the Board shall have the power, by the affirmative vote of two-thirds of the Governors then in office, to remove such Governor and declare such Governor's position vacant and that, subject to the Restated Certificate of Incorporation, such position shall be filled in accordance with these By-Laws; provided, that during the Transitional Period, (i) a Governor that is a member of the NYSE Group Committee may only be removed by the affirmative vote of a majority of the Governors who are members of the NYSE Group Committee and (ii) a Governor that is a member of the NASD Group Committee may only be removed by the affirmative vote of a majority of the Governors who are members of the NASD Group Committee.
(c) To the fullest extent permitted by applicable law, the Restated Certificate of Incorporation, and these By-Laws, the Corporation may delegate any power of the Corporation or the Board to a committee appointed pursuant to Article IX, Section 1, the NASD Regulation Board, the NASD Dispute Resolution Board, or the Corporation's staff in a manner not inconsistent with the Delegation Plan; provided, that during the Transitional Period, no such delegation shall occur without the prior affirmative vote of two-thirds of the Governors then in office.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-93-48 eff. Mar. 8, 1994. Amended by SR-NASD-88-12 eff. Nov. 2, 1988. Amended by SR-NASD-88-20 eff. Oct. 25, 1988. Selected Notice: 87-53, 87-79, 88-19, 88-96, 93-15, 94-24. |
Sec. 2. (a) The Board shall have authority, upon notice and opportunity for a hearing, to cancel or suspend the membership of any member or suspend the association of any person associated with a member for failure to file, or to submit on request, any report, document, or other information required to be filed with or requested by the Corporation pursuant to these By-Laws or the Rules of the Corporation.
(b) Any membership or association suspended or canceled pursuant to this Section may be reinstated by the Corporation pursuant to the Rules of the Corporation.
(c) The Board is authorized to delegate its authority under this Section in a manner not inconsistent with the Delegation Plan and otherwise in accordance with the Rules of the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 3. The Board, or such person or persons as may be designated by the Board, in the event of an emergency or extraordinary market conditions, shall have the authority to take any action regarding:
(a) the trading in or operation of the over-the-counter securities market, the operation of any automated system owned or operated by the Corporation or NASD Regulation, and the participation in any such system of any or all persons or the trading therein of any or all securities; and
(b) the operation of any or all member firms' offices or systems, if, in the opinion of the Board or the person or persons hereby designated, such action is necessary or appropriate for the protection of investors or the public interest or for the orderly operation of the marketplace or the system.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff,. July 11, 1996. Amended by SR-NASD-94-64 eff. Feb. 9, 1995. Adopted by SR-NASD-88-17 eff. Sept. 12, 1988. Selected Notices: 88-8, 88-29. |
Sec. 4. (a) The Board shall consist of no fewer than 16 nor more than 25 Governors. The number of Public Governors shall exceed the number of Industry Governors.
From and after the Transitional Period, the Board of Governors shall consist of (i) the Chief Executive Officer of the Corporation, (ii) a number of Public Governors determined by the Board, (iii) a Floor Member Governor, an Independent Dealer/Insurance Affiliate Governor and an Investment Company Affiliate Governor and (iv) three Small Firm Governors, one Mid-Size Firm Governor and three Large Firm Governors.
From and after the Transitional Period, the Board of Governors shall consist of (i) the Chief Executive Officer of the Corporation, (ii) a number of Public Governors determined by the Board, (iii) a Floor Member Governor, an Independent Dealer/Insurance Affiliate Governor and an Investment Company Affiliate Governor and (iv) three Small Firm Governors, one Mid-Size Firm Governor and three Large Firm Governors.
(b) As soon as practicable following the annual election of Governors, the Board shall elect from among its members a Chair and such other persons having such titles as it shall deem necessary or advisable, to serve until the next annual election or until their successors are chosen and qualify. The Chair of the Board shall preside over all meetings of the Board, and shall not have any other power or authority except as otherwise expressly provided for herein. The Lead Governor shall preside at all meetings of the Board at which the Chair is not present, and shall have the authority to call, and will lead if the Chair of the Board is recused, executive sessions of the Board. Any other persons elected under this subsection shall have such powers and duties as may be determined from time to time by the Board. Except as otherwise provided herein, the Board, by resolution adopted by a majority of the Governors then in office, (i) after the completion of the Transitional Period, may remove the Chair and any person elected under this subsection from such position at any time and (ii) during the Transitional Period, may remove any person, other than the Chair, elected under this subsection from such position at any time.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2004-110 eff. Dec. 31, 2004. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Amended by SR-NASD-98-56 eff. Oct. 30, 1998. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-96-02 eff. Apr. 11, 1996. Amended by SR-NASD-94-64 eff. Feb. 9, 1995. Amended by SR-NASD-90-36 eff. Sept. 4, 1990. Selected Notices: 88-8, 88-29, 90-64. |
Sec. 5. From and after the Transitional Period:
The Chief Executive Officer shall serve as a Governor until a successor is elected, or until death, resignation, or removal.
The Chief Executive Officer shall serve as a Governor until a successor is elected, or until death, resignation, or removal.
Public Governors and the Floor Member Governor, the Independent Dealer/Insurance Affiliate Governor and the Investment Company Affiliate Governor (the "Appointed Governors") shall be appointed by the Board from candidates recommended to the Board by the Nominating Committee.
As of the first annual meeting of members following the Transitional Period, the Appointed Governors shall be divided by the Board into three classes, as equal in number as possible, with the first class holding office until the first succeeding annual meeting of members, the second class holding office until the second succeeding annual meeting of members and the third class holding office until the third succeeding annual meeting of members, or until a successor is duly appointed and qualified, or until death, resignation, disqualification, or removal. Each class shall initially contain as equivalent a number as possible of Appointed Governors who were members of the NYSE Group Committee during the Transitional Period or are successors to such Governor positions, on the one hand, and Appointed Governors who were members of the NASD Group Committee during the Transitional Period or are successors to such Governor positions, on the other hand, to the extent the Board determines such persons are to remain Governors after the Transitional Period. No Appointed Governor may serve more than two consecutive terms. If a Governor is appointed to fill a vacancy of such a Governor position for a term of less than one year, the Governor may serve up to two consecutive terms following the expiration of the Governor's initial term. At each annual election following the first annual meeting of members following the Transitional Period, Appointed Governors shall be appointed by the Board for a term of three years to replace those whose terms expire.
As of the first annual meeting of members following the Transitional Period, the Large Firm Governors, the Mid-Size Firm Governor and the Small Firm Governors shall be divided into three classes, as equal in number as possible, with the first class, being comprised of one Large Firm Governor and one Small Firm Governor, holding office until the first succeeding annual meeting of members, the second class, being comprised of one Large Firm Governor, one Mid-Size Firm Governor and one Small Firm Governor, holding office until the second succeeding annual meeting of members and the third class, being comprised of one Large Firm Governor and one Small Firm Governor, holding office until the third succeeding annual meeting of members, or until a successor is duly elected and qualified, or until death, resignation, disqualification, or removal. A Governor elected by the members may not serve more than two consecutive terms. If a Governor is elected to fill a vacancy of such a Governor position for a term of less than one year, the Governor may serve up to two consecutive terms following the expiration of the Governor's initial term. At each annual election following the first annual meeting of members following the Transitional Period, Large Firm Governors, Small Firm Governors and the Mid-Size Firm Governor shall be elected for a term of three years to replace those whose terms expire.
In the event of any vacancy among the Large Firm Governors, the Mid-Size Firm Governor or the Small Firm Governors, such vacancy shall only be filled by the Large Firm Governor Committee in the case of a Large Firm Governor vacancy, the Board in the case of a Mid-Size Firm Governor vacancy or the Small Firm Governor Committee in the case of a Small Firm Governor vacancy; provided, however, that in the event the remaining term of office of any Large Firm, Mid-Size Firm or Small Firm Governor position that becomes vacant is for more than 12 months, such vacancy shall be filled by the members entitled to vote thereon at a meeting thereof convened to vote thereon.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2004-110 eff. Dec. 31, 2004. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Amended by SR-NASD-98-56 eff. Oct. 30, 1998. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-90-36 eff. Sept. 4, 1990. Selected Notices: 90-64. |
Sec. 6. Notwithstanding Section 5 or Article XXII, the term of office of a Governor shall terminate immediately upon a determination by the Board, by a majority vote of the remaining Governors, that: (a) the Governor no longer satisfies the classification for which the Governor was elected; and (b) the Governor's continued service as such would violate the compositional requirements of the Board set forth in Section 4 (or, in the case of the Transitional Period, Article XXII). If the term of office of a Governor terminates under this Section, and the remaining term of office of such Governor at the time of termination is not more than six months, during the period of vacancy the Board shall not be deemed to be in violation of Section 4 (or, in the case of the Transitional Period, Article XXII) by virtue of such vacancy.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-98-56 eff. Oct. 30, 1998. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Intentionally Deleted
Sec. 7. Intentionally Deleted
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-96-02 eff. Apr. 11, 1996. Amended eff. Sept. 4, 1990. |
Sec. 8. Meetings of the Board shall be held at such times and places, upon such notice, and in accordance with such procedure as the Board in its discretion may determine. Special meetings of the Board of the Corporation may be called by the Board, the Chief Executive Officer of the Corporation, the Chair or the Lead Governor. Each of the Chief Executive Officer of the Corporation and the Chair, and with respect to matters from which the Chief Executive Officer of the Corporation and the Chair recuse themselves, the Lead Governor, shall have the authority to include matters on the agenda of a meeting of the Board. At all meetings of the Board, unless otherwise set forth in these By-Laws or required by law, a quorum for the transaction of business shall consist of a majority of the Board, including not less than 50 percent of the Public Governors. Any action taken by a majority vote at any meeting at which a quorum is present, except as otherwise provided in the Restated Certificate of Incorporation or these By-Laws, shall constitute the action of the Board. Governors or members of any committee appointed by the Board under Article IX, Section 1 may participate in a meeting of the Board or a committee by means of communications facilities that ensure all persons participating in the meeting can hear and speak to one another, and participation in a meeting pursuant to this By-Law shall constitute presence in person at such meeting. No Governor shall vote by proxy at any meeting of the Board.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-86-28 eff. Dec. 15, 1986. Selected Notices: 88-96, 93-15, 94-24, 94-52. |
Sec. 9. (a) Except as otherwise provided in these By-Laws, the Nominating Committee shall nominate and, in the event of a contested election, may, as described in Section 11(b), support: Large Firm, Mid-Size Firm, Small Firm, Public, Floor Member, Independent Dealer/Insurance Affiliate and Investment Company Affiliate Governors for each such vacant or new Governor position on the Board; Industry and Public Directors for each vacant or new position on the NASD Regulation Board and the NASD Dispute Resolution Board for election by the stockholder; and Industry and Public members for each vacant or new position on the National Adjudicatory Council for appointment by the NASD Regulation Board.
(b) Except as otherwise provided in these By-laws, after the completion of the Transitional Period the Nominating Committee shall consist of such number of members of the Board as the Board shall determine from time to time; provided, however, that the Nominating Committee shall at all times be comprised of a number of members which is a minority of the entire Board and the Chief Executive Officer shall not be a member of the Nominating Committee. The number of Public Governors on the Nominating Committee shall equal or exceed the number of Industry Governors on the Nominating Committee.
(c) After the completion of the Transitional Period, and except as otherwise provided in these By-Laws, members of the Nominating Committee shall be appointed annually by the Board and may be removed only by majority vote of the whole Board, after appropriate notice, for refusal, failure, neglect, or inability to discharge such member's duties.
(d) The Secretary of the Corporation shall collect from each nominee for Governor such information as is reasonably necessary to serve as the basis for a determination of the nominee's classification a Large Firm, Mid-Size Firm, Small Firm, Public, Floor Member, Independent Dealer/Insurance Affiliate and/or Investment Company Affiliate Governor, and the Secretary shall certify to the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) each nominee's classification.
(e) At all meetings of the Nominating Committee, a quorum for the transaction of business shall consist of a majority of the Nominating Committee. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May 8, 2001. Amended by SR-NASD-97-92 eff. May 5, 1998. Amended by SR-NASD-97-71 eff. Jan. 15, 1998 (Sec. 9(a), 9(e) eff. Nov. 14, 1997). Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-94-64 eff. Feb. 9, 1995. Amended by SR-NASD-90-36 eff. Sept. 4, 1990. Amended by SR-NASD-90-34 eff. July 19, 1990. Selected Notices: 90-64. |
Sec. 10. Prior to a meeting of members pursuant to Article XXI for the election of Governors, the Corporation shall notify the members of the names of each nominee selected by the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) for each governorship up for election by the members, the classification of governorship (Large Firm, Mid-Size Firm or Small Firm) for which the nominee is nominated, the qualifications of each nominee, and such other information regarding each nominee as the Board or the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) deems pertinent. A person who has not been so nominated may be included on the ballot for the election of Governors if: (a) within 45 days after the date of such notice, such person presents to the Secretary of the Corporation (i) in the case of petitions solely in support of such person, petitions in support of his or her nomination duly executed by three percent of the members entitled to vote for such nominees' election, and no such member shall endorse more than one such nominee, or (ii) in the case of petitions in support of more than one person, petitions in support of the nominations of such persons duly executed by ten percent of the members entitled to vote for such nominees' election; and (b) the Secretary certifies that (i) the petitions are duly executed by the Executive Representatives of the requisite number of members entitled to vote for such nominee's/nominees' election, and (ii) the person(s) satisfies/satisfy the classification (Large Firm, Mid-Size Firm or Small Firm) of the governorship(s) to be filled, based on such information provided by the person(s) as is reasonably necessary to make the certification. The Secretary shall not unreasonably withhold or delay the certification. Upon certification, the election shall be deemed a contested election with respect to the category of Governor to which the nomination relates. After the certification of a contested election or the expiration of time for contesting an election under this Section, the Secretary shall deliver notice of a meeting of members pursuant to Article XXI, Section 3(a).
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-94-64 eff. Feb. 9, 1995. Amended eff. July 19, 1990 and Sept. 4, 1990. |
Sec. 11. (a) The Corporation, the Board, a committee appointed pursuant to Article IX, Section 1, and the Corporation's staff shall not take any position publicly or with a member or person associated with or employed by a member with respect to any candidate in a contested election or nomination held pursuant to these By-Laws or the NASD Regulation By-Laws. A Governor or a member of any committee (other than the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein)) may communicate his or her views with respect to any candidate if such Governor or committee member acts solely in his or her individual capacity and disclaims any intention to communicate in any official capacity on behalf of the Corporation, the Board, or any committee (other than the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein)). Except as provided herein, any candidate and his or her representatives may communicate support for the candidate to a member or person associated with or employed by a member.
(b) In a contested election, the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) may support its nominees under this Article by sending to members eligible to vote up to two mailings of materials in support of its nominees in lieu of mailings sent by its candidates under Article VII, Section 12. In addition to such mailings, in the event of mailings and or other communications to members by or on behalf of a candidate by petition in a contested election, the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) may respond in-kind, but shall not take a position unresponsive, to the contesting candidate's communications.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May. 8, 2001. Adopted by SR-NASD-97-71 eff. Nov. 14, 1997. |
Sec. 12. The Secretary of the Corporation shall provide administrative support to the candidates in a contested election under this Article by sending to members eligible to vote for such category of Governors up to two mailings of materials prepared by the candidates. The Corporation shall pay the postage for the mailings. If a candidate wants such mailings sent, the candidate shall prepare such material on the candidate's personal stationery. The material shall state that it represents the opinions of the candidate. The candidate shall provide a copy of such material for each member eligible to vote for such category of Governors. A candidate nominated by the Nominating Committee (or, in the case of Article XXII, the relevant body with the authority to nominate as specified therein) may identify himself or herself as such in his or her materials. Any candidate may send additional materials to members at the candidate's own expense. Except as provided in this Article, the Corporation, the Board, any committee, and the Corporation's staff shall not provide any other administrative support to a candidate in a contested election conducted under this Article or a contested election or nomination conducted under the NASD Regulation By-Laws.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 13. Governors that are to be elected by the members shall be elected by a plurality of the votes of the members of the Corporation present in person or represented by proxy at the annual meeting of the Corporation and entitled to vote for such category of Governors. The annual meeting of the Corporation shall be on such date and at such place as the Board shall designate pursuant to Article XXI. Except as otherwise provided in these By-Laws or the Restated Certificate of Incorporation, any Governor so elected must be nominated by the Nominating Committee or certified by the Secretary pursuant to Section 10.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May 8, 2001. Amended by SR-NASD-97-71 eff. Nov. 14, 1997. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-94-64 eff. Feb. 9, 1995. Amended eff. July 19, 1990 and Sept. 4, 1990. |
Sec. 14. Each elected or appointed Governor shall update the information submitted under Section 9(d) regarding his or her classification as a Large Firm, Mid-Size Firm, Small Firm, Public, Floor Member, Independent Dealer/Insurance Affiliate and/or Investment Company Affiliate Governor at least annually and upon request of the Secretary of the Corporation, and shall report immediately to the Secretary any change in such classification.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May 8, 2001. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 15. Any Governor may resign at any time either upon written notice of resignation to the Chief Executive Officer or the Secretary. Any such resignation shall take effect at the time specified therein or, if the time is not specified, upon receipt thereof, and the acceptance of such resignation, unless required by the terms thereof, shall not be necessary to make such resignation effective.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. The Board shall elect a Chief Executive Officer, who shall be responsible for the management and administration of its affairs and shall be the official representative of the Corporation in all public matters and who shall have such powers and duties in the management of the Corporation as may be prescribed in a resolution by the Board, and which powers and duties shall not be inconsistent with the Delegation Plan. The Board shall elect a Secretary, who shall have such powers and duties conferred by these By-Laws and such other powers and duties as may be prescribed in a resolution by the Board. The Board may provide for such other executive or administrative officers as it shall deem necessary or advisable. All such officers shall have such titles, powers, and duties, and shall be entitled to such compensation, as shall be determined from time to time by the Board. Each such officer shall hold office until a successor is elected and qualified or until such officer's earlier resignation or removal. Any officer may resign at any time upon written notice to the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Nov. 17, 1997. Amended by SR-NASD-96-20 eff. July 11, 1996. |
Sec. 2. In the case of the absence or inability to act of the Chief Executive Officer of the Corporation, or in the case of a vacancy in such office, the Board may appoint its Chair or such other person as it may designate to act as such officer pro tem, who shall assume all the functions and discharge all the duties of the Chief Executive Officer.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Nov. 17, 1997. Amended by SR-NASD-96-20 July 11, 1996. |
Sec. 3. The Board may employ or authorize the employment and prescribe the powers and duties of such agents and employees as it deems necessary or advisable. The employment and compensation of such agents and employees shall be at the pleasure of the Board, provided that such determinations are not inconsistent with the requirements of the Delegation Plan. Except as provided in Article IX, Section 5(d), agents and employees of the Corporation shall be under the supervision and control of the officers of the Corporation, unless the Board provides by resolution that an agent or employee shall be under the supervision and control of the Board.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Nov. 17, 1997. Amended by SR-NASD-96-20 July 11, 1996. |
Sec. 4. The Board may retain or authorize the employment of counsel, with such powers, titles, duties, and authority as it shall deem necessary or advisable.
| Amended by SR-NASD-97-71 eff. Nov. 17, 1997. Amended by SR-NASD-96-20 eff. July 11, 1996. |
Sec. 5. The Board may delegate the duties and powers of any officer of the Corporation to any other officer or to any Governor for a specified period of time and for any reason that the Board may deem sufficient.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 6. (a) Any officer may resign at any time upon written notice of resignation to the Board, the Chief Executive Officer, or the Secretary. Any such resignation shall take effect upon receipt of such notice or at any later time specified therein. The acceptance of a resignation shall not be necessary to make the resignation effective.
(b) Any officer of the Corporation may be removed, with or without cause, by resolution adopted by a majority of the Governors then in office at any regular or special meeting of the Board or by a consent adopted by all of the Governors then in office in accordance with applicable law. Such removal shall be without prejudice to the contractual rights of the affected officer, if any, with the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May 8, 2001. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 7. The Corporation may secure the fidelity of any or all of its officers, agents, or employees by bond or otherwise.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. (a) The Corporation shall have the following committees of the Board: the NASD Group Committee (during the Transitional Period); the NYSE Group Committee (during the Transitional Period); the Small Firm Governor Committee; and the Large Firm Governor Committee, which in each case shall be comprised of the Governors specified herein and in the Restated Certificate of Incorporation to be the members thereof and shall have the authority provided for herein and in the Restated Certificate of Incorporation. The Corporation shall also have the following committees: the Audit Committee, the Finance Committee and, during the first year of the Transitional Period or as extended thereafter by resolution of the Board, the Integration Committee, which in each case shall have the authority provided for herein.
(b) Subject to Article VII, Section 1(c), the Board may appoint such other committees or subcommittees as it deems necessary or desirable, and it shall fix their powers, duties, and terms of office in a manner not inconsistent with these By-Laws or the Restated Certificate of Incorporation. Any such other committee or subcommittee consisting solely of one or more Governors, to the extent provided by these By-Laws or by resolution of the Board and to the extent not inconsistent with these By-Laws or the Restated Certificate of Incorporation, shall have and may exercise all powers and authority of the Board in the management of the business and affairs of the Corporation. Any such other committee having the authority to exercise the powers and authority of the Board shall have a number of Public Governors as members thereof in excess of the number of Industry Governors which are members thereof. During the Transitional Period, all committees of the Board having the authority to exercise the powers and authority of the Board (with the exception of the Large Firm Governor Committee, the Small Firm Governor Committee, the NASD Group Committee and the NYSE Group Committee), shall also have (i) a percentage of members (to the nearest whole number of committee members) that are members of the NASD Group Committee at least as great as the percentage of Governors on the Board that are members of the NASD Group Committee; and (ii) a percentage of members (to the nearest whole number of committee members) that are members of the NYSE Group Committee at least as great as the percentage of Governors on the Board that are members of the NYSE Group Committee.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996 Amended eff. Sept. 4, 1990; |
Sec. 2. Upon request of the Secretary of the Corporation, each prospective committee member who is not a Governor shall provide to the Secretary such information as is reasonably necessary to serve as the basis for a determination of the prospective committee member's classification as an Industry or Public committee member. The Secretary shall certify to the Board each prospective committee member's classification. Each committee member shall update the information submitted under this Section at least annually and upon request of the Secretary of the Corporation, and shall report immediately to the Secretary any change in such classification.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 3. A member of the Audit Committee, the Finance Committee (other than the Chair thereof) or a committee or subcommittee appointed pursuant to Section 1(b) of this Article may be removed from such committee or subcommittee only by a majority vote of the whole Board, after appropriate notice, for refusal, failure, neglect, or inability to discharge such member's duties.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended eff. Sept. 4, 1990. |
Sec. 4. (a) The Board may appoint an Executive Committee, which shall, to the fullest extent permitted by the General Corporation Law of the State of Delaware and other applicable law, and subject to the Restated Certificate of Incorporation and these By-Laws, have and be permitted to exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation between meetings of the Board, and which may authorize the seal of the Corporation to be affixed to all papers that may require it.
(b) The Executive Committee shall consist of no fewer than five and no more than eight Governors. The Executive Committee shall include the Chief Executive Officer of the Corporation and the Chair of the Board.
(c) An Executive Committee member shall hold office for a term of one year.
(d) At all meetings of the Executive Committee, a quorum for the transaction of business shall consist of a majority of the Executive Committee, including not less than 50 percent of the Public committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2004-110 eff. Dec. 31, 2004. Amended by SR-NASD-2001-06 eff. May 8, 2001. Amended by SR-NASD-98-56 eff. Oct. 30, 1998. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 5. (a) The Board shall appoint an Audit Committee. The Audit Committee shall consist of four or five Governors, none of whom shall be officers or employees of the Corporation. The Audit Committee shall include at least two Public Governors. A Public Governor shall serve as Chair of the Committee. An Audit Committee member shall hold office for a term of one year.
(b) The Audit Committee shall perform the following functions: (i) ensure the existence of adequate controls and the integrity of the financial reporting process of the Corporation; (ii) recommend to the Board, and monitor the independence and performance of, the certified public accountants retained as outside auditors by the Corporation; and (iii) direct and oversee all the activities of the Corporation's internal review function, including but not limited to management's responses to the internal review function.
(c) No member of the Audit Committee shall participate in the consideration or decision of any matter relating to a particular member, company, or individual if such Audit Committee member has a material interest in, or a professional, business, or personal relationship with, that member, company, or individual, or if such participation shall create an appearance of impropriety. An Audit Committee member shall consult with the General Counsel of the Corporation to determine if recusal is necessary. If a member of the Audit Committee is recused from consideration of a matter, any decision on the matter shall be by a vote of a majority of the remaining members of the Audit Committee.
(d) The Audit Committee shall have exclusive authority to: (i) hire or terminate the Director of Internal Review; (ii) determine the compensation of the Director of Internal Review; and (iii) determine the budget for the Office of Internal Review. The Office of Internal Review and the Director of Internal Review shall report directly to the Audit Committee. The Audit Committee may, in its discretion, direct that the Office of Internal Review also report to senior management of the Corporation on matters the Audit Committee deems appropriate and may request that senior management perform such operational oversight as necessary and proper, consistent with preservation of the independence of the internal review function.
(e) At all meetings of the Audit Committee, a quorum for the transaction of business shall consist of a majority of the Audit Committee, including not less than 50 percent of the Public committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 6. (a) The Board shall appoint a Finance Committee. The Finance Committee shall advise the Board with respect to the oversight of the financial operations and conditions of the Corporation, including recommendations for the Corporation's annual operating and capital budgets and proposed changes to the rates and fees charged by Corporation.
(b) The Finance Committee shall consist of four or more Governors. The Chief Executive Officer of the Corporation shall be a member of the Finance Committee. A Finance Committee member shall hold office for a term of one year.
(c) At all meetings of the Finance Committee, a quorum for the transaction of business shall consist of a majority of the Finance Committee, including not less than 50 percent of the Public committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
(d) The Corporation shall also have an Investment Committee which shall not be a committee of the Board. The majority of the Investment Committee during the Transitional Period will be comprised of members of the Investment Committee immediately prior to the Closing, unless otherwise determined by the NASD Group Committee, and a minority of the Investment Committee during the Transitional Period will be comprised of members of the NYSE Group Committee.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 7. (a) The Board shall appoint an Integration Committee. The Integration Committee shall have a term not to exceed one year from the Closing unless continued for a longer period by resolution of the Board.
(b) The Chair of the Board shall be the Chair of the Integration Committee unless, in the case of the Integration Committee continuing beyond one year after Closing pursuant to Section 7(a), otherwise determined by the Board.
(c) At all meetings of the Integration Committee, a quorum for the transaction of business shall consist of a majority of the Integration Committee, including not less than 50 percent of the Public committee members. In the absence of a quorum, a majority of the committee members present may adjourn the meeting until a quorum is present.
| Adopted by SR-NASD-2007-023 eff. July 30, 2007. |
Sec. 1. The Board may provide for reasonable compensation of the Chair of the Board, the Governors, and the members of any committee. The Board may also provide for reimbursement of reasonable expenses incurred by such persons in connection with the business of the Corporation, including those expenses incurred in connection with the support of a candidate or candidates by the Nominating Committee in contested elections in accordance with the By-Laws.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2001-06 eff. May 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended eff. Apr. 15, 1987 and Sept. 4, 1990. |
Sec. 1. To promote and enforce just and equitable principles of trade and business, to maintain high standards of commercial honor and integrity among members of the Corporation, to prevent fraudulent and manipulative acts and practices, to provide safeguards against unreasonable profits or unreasonable rates of commissions or other charges, to protect investors and the public interest, to collaborate with governmental and other agencies in the promotion of fair practices and the elimination of fraud, and in general to carry out the purposes of the Corporation and of the Act, the Board is hereby authorized to adopt such rules for the members and persons associated with members, and such amendments thereto as it may, from time to time, deem necessary or appropriate. If any such rules or amendments thereto are approved by the Commission as provided in the Act, they shall become effective Rules of the Corporation as of such date as the Board may prescribe. The Board is hereby authorized, subject to the provisions of the By-Laws and the Act, to administer, enforce, suspend, or cancel any Rules of the Corporation adopted hereunder.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended by SR-NASD-93-48 eff. Mar. 8, 1994. Selected Notice: 93-15, 94-52. |
Sec. 1. The Board shall have authority to establish procedures relating to disciplinary proceedings involving members and their associated persons.
| Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. |
Sec. 2. Except as otherwise permitted under these By-Laws or the Act, in any disciplinary proceeding under the Rules of the Corporation, any member or person associated with a member shall be given the opportunity to have a hearing at which such member or person associated with a member shall be entitled to be heard in person or by counsel or by a representative as provided in the Rules of the Corporation. Such persons may present any relevant material in accordance with the Rules of the Corporation. In any such proceeding against a member or against a person associated with a member to determine whether the member or the person associated with a member shall be disciplined:
(a) specific charges shall be brought;
(b) such member or person associated with a member shall be notified of and be given an opportunity to defend against such charges;
(c) a record shall be kept; and
(d) any determination shall include a statement setting forth:
(i) any act or practice, in which such member or person associated with a member may be found to have engaged or which such member or person associated with a member may be found to have omitted;
(ii) the rule, regulation, or statutory provision of which any such act or practice, or omission to act, is deemed to be in violation;
(iii) the basis upon which any findings are made; and
(iv) the sanction imposed.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. |
Sec. 1. The Board is hereby authorized to impose appropriate sanctions applicable to members, including censure, fine, suspension, or expulsion from membership, suspension or bar from being associated with all members, limitation of activities, functions, and operations of a member, or any other fitting sanction, and to impose appropriate sanctions applicable to persons associated with members, including censure, fine, suspension or barring a person associated with a member from being associated with all members, limitation of activities, functions, and operations of a person associated with a member, or any other fitting sanction, for:
(a) breach by a member or a person associated with a member of any covenant with the Corporation or its members;
(b) violation by a member or a person associated with a member of any of the terms, conditions, covenants, and provisions of the By-Laws of the Corporation, NASD Regulation, or NASD Dispute Resolution, the Rules of the Corporation, or the federal securities laws, including the rules and regulations adopted thereunder, the rules of the Municipal Securities Rulemaking Board, and the rules of the Treasury Department;
(c) failure by a member or person associated with a member to: (i) submit a dispute for arbitration as required by the Rules of the Corporation; (ii) appear or produce any document in the member's or person's possession or control as directed pursuant to the Rules of the Corporation; (iii) comply with an award of arbitrators properly rendered pursuant to the Rules of the Corporation, where a timely motion to vacate or modify such award has not been made pursuant to applicable law or where such a motion has been denied; or (iv) comply with a written and executed settlement agreement obtained in connection with an arbitration or mediation submitted for disposition pursuant to the Rules of the Corporation;
(d) refusal by a member or person associated with a member to abide by an official ruling of the Board or any committee exercising powers assigned by the Board with respect to any transaction which is subject to the Uniform Practice Code; or
(e) failure by a member or person associated with a member to adhere to any ruling, order, direction, or decision of or to pay any sanction, fine, or costs imposed by the Board or any entity to which the Board has delegated its powers in accordance with the Delegation Plan.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-2001-06 eff. May 8, 2001. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. Amended eff. Sept. 4, 1990. |
Sec. 2. The Board may delegate its authority under this Article in accordance with the Delegation Plan.
| Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. The Board is hereby authorized to adopt a Uniform Practice Code and amendments, interpretations and explanations thereto, designed to make uniform, where practicable, custom, practice, usage, and trading technique in the investment banking and securities business with respect to such matters as trade terms, deliveries, payments, dividends, rights, interest, reclamations, exchange of confirmations, stamp taxes, claims, assignments, powers of substitution, computation of interest and basis prices, due-bills, transfer fees, "when, as and if issued" trading, "when, as and if distributed" trading, marking to the market, and close-out procedure, all to the end that the transaction of day-to-day business by members may be simplified and facilitated, that business disputes and misunderstandings, which arise from uncertainty and lack of uniformity in such matters, may be eliminated, and that the mechanisms of a free and open market may be improved and impediments thereto removed.
| Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. |
Sec. 2. The administration of any Uniform Practice Code, or any amendment thereto, adopted by the Board pursuant to Section 1, shall be vested in the Board, and the Board is hereby granted such powers as are reasonably necessary to achieve its effective operation. In the exercise of such powers, the Board may issue explanations and interpretations and make binding rulings with respect to the applicability of the provisions of the Uniform Practice Code to situations in which there is no substantial disagreement as to the facts involved. In accordance with the Delegation Plan, the Board may delegate to the NASD Regulation Board such of the Board's powers hereunder as it deems necessary and appropriate to achieve effective administration and operation of the Uniform Practice Code.
| Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-2005-087 eff. Aug. 1, 2006 Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. |
Sec. 3. All over-the-counter transactions in securities by members, except transactions in securities which are exempted under Section 3(a)(12) of the Act, or are municipal securities as defined in Section 3(a)(29) of the Act, are subject to the provisions of the Uniform Practice Code and to the provisions of Section 2 unless exempted therefrom by the terms of the Uniform Practice Code.
| Amended by SR-NASD-97-71 eff. Jan. 15, 1998. Amended by SR-NASD-96-20 eff. July 11, 1996. |
Sec. 1. Under no circumstances shall the Board or any officer, employee, or member of the Corporation have the power to:
(a) make any donation or contribution from the funds of the Corporation or to commit the Corporation for the payment of any donations or contributions for political or charitable purposes; or
(b) use the name or the facilities of the Corporation in aid of any political party or candidate for any public office.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-2005-087 eff. Aug. 1, 2006 Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 2. No member shall use the name of the Corporation except to the extent that may be permitted by the Rules of the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 3. No officer, employee, member of the Board or of any committee shall have any power to incur or contract any liability on behalf of the Corporation not authorized by the Board. The Board may delegate to the Chief Executive Officer of the Corporation or the Chief Executive Officer's delegate such authority as it deems necessary to contract on behalf of the Corporation or to satisfy unanticipated liabilities during the period between Board meetings.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 4. (a) A Governor or a member of a committee shall not directly or indirectly participate in any adjudication of the interests of any party if such Governor or committee member has a conflict of interest or bias, or if circumstances otherwise exist where his or her fairness might reasonably be questioned. In any such case, the Governor or committee member shall recuse himself or herself or shall be disqualified in accordance with the Rules of the Corporation.
(b) No contract or transaction between the Corporation and one or more of its Governors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its Governors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason if: (i) the material facts pertaining to such Governor's or officer's relationship or interest and the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative vote of a majority of the disinterested Governors, even though the disinterested governors be less than a quorum; or (ii) the material facts are disclosed or become known to the Board or committee after the contract or transaction is entered into, and the Board or committee in good faith ratifies the contract or transaction by the affirmative vote of a majority of the disinterested Governors even though the disinterested governors be less than a quorum. Only disinterested Governors may be counted in determining the presence of a quorum at the portion of a meeting of the Board or of a committee that authorizes the contract or transaction. This subsection shall not apply to any contract or transaction between the Corporation and NASD Regulation, or NASD Dispute Resolution.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-2006-104 eff. Dec. 20, 2006. Amended by SR-NASD-2006-135 eff. Dec. 20, 2006. Amended by SR-NASD-2004-110 eff. Dec. 31, 2004. Amended by SR-NASD-2001-06 eff. May 8, 2001. Amended by SR-NASD-98-56 eff. Oct. 30, 1998. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 5. The provisions of the By-Laws conferring rulemaking authority upon the Board shall not be applicable to the municipal securities activities of members or persons associated with members to the extent that the application of such authority would be inconsistent with Section 15B of the Act.
| Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. A Governor or a committee appointed by the Board may propose amendments to these By-Laws. Any 25 members of the Corporation by petition signed by such members may propose amendments to these By-Laws. Every proposed amendment shall be presented in writing to the Board, and a record shall be kept thereof. The Board may adopt any proposed amendment to these By-Laws by affirmative vote of a majority of the Governors then in office. The Board, upon adoption of any such amendment to these By-Laws, except as to spelling or numbering corrections or as otherwise provided in these By-Laws, shall forthwith cause a copy to be sent to and voted upon by each member of the Corporation. If such amendment to these By-Laws is approved by a majority of the members voting within 30 days after the date of submission to the membership, and is approved by the Commission as provided in the Act, it shall become effective as of such date as the Board may prescribe.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." Said seal may be used by causing it or a facsimile thereof to be imposed or affixed or reproduced or otherwise.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. All checks or demands for money and notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board may from time to time designate.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. As soon as practicable after the end of each fiscal year, the Board shall send to each member of the Corporation a reasonably itemized statement of receipts and expenditures of the Corporation for such preceding fiscal year.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Amended by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. In order that the Corporation may determine the members entitled to notice of or to vote at any meeting of members or any adjournment thereof, or to express consent or dissent to corporate action in writing without a meeting, or for the purpose of any other lawful action, the Board may fix, in advance, a record date, pursuant to Section 213 of the General Corporation Law of the State of Delaware. Only such members as shall be members of record on the date so fixed shall be entitled to notice of and to vote at such meeting or any adjournment thereof, or to give such consent or dissent.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 2. If no record date is fixed by the Board, the record date for determining members entitled to notice of or to vote at a meeting of members shall be at the close of business on the day next preceding the date on which notice is given, or if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.
| Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 3. A determination of members of record entitled to notice of or to vote at a meeting of members shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting.
| Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 1. The annual meeting shall be on such date and at such place as the Board shall designate; provided, however, that, except for the first annual meeting following the Closing at which Large Firm Governors, the Mid-Size Governor and Small Firm Governors shall be elected, there shall be no annual meetings of members during the Transitional Period. The business of the meeting shall include: (a) election of the members of the Board pursuant to Article VII, Section 13; and (b) the proposal of business (i) by or at the direction of the Chief Executive Officer of the Corporation or the Board, or (ii) by any member entitled to vote at the meeting who complied with the notice procedures set forth in Section 3 and was a member at the time such notice was delivered to the Secretary of the Corporation.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 2. A special meeting shall be on such date and at such place as the Board shall designate. Only such business shall be conducted at a special meeting as shall have been brought before the meeting pursuant to Section 3(a); provided, however, that in no event shall the announcement to the members of an adjournment of a special meeting commence a new time period for the giving of notice.
| Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 3. (a) Notice of each meeting shall be written or printed; shall state the date, time, and place of the meeting; shall state the purpose or purposes for which the meeting is called; and unless it is the annual meeting, indicate that the notice is being issued at the direction of the person or persons calling the meeting. The Secretary of the Corporation shall deliver the notice to the Executive Representative of each member entitled to vote not less than 30 days nor more than 60 days before the date of an annual meeting and not less than ten days nor more than 60 days before the date of a special meeting. If mailed, the notice shall be deemed to be delivered when deposited with postage in the United States mail and addressed to the Executive Representative of the member as it appears on the records of the Corporation. Such further notice shall be given as may be required by law. Meetings may be held without notice if all members entitled to vote are present (except as otherwise provided by law), or if notice is waived by those not present. Any previously scheduled meeting of the members may be postponed and any special meeting of the members may be canceled by resolution of the Board upon notice given to the members prior to the time previously scheduled for the meeting.
(b) For business other than the election of Governors to be brought properly before an annual meeting by a member pursuant to Section 1, the member must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for member action. To be timely, a member's notice shall be delivered to the Secretary at the Corporation's principal executive offices within 25 days after the date of the notice of the meeting. Such member's notice shall set forth a brief description of the business desired to be brought before the meeting, any material interest of the member in such business, and the reasons for conducting such business at the meeting. In no event shall the announcement to the members of an adjournment of an annual meeting commence a new time period for the giving of a member's notice as described above.
(c) Except as otherwise provided by applicable law, the Restated Certificate of Incorporation, or these By-Laws, the chairman of the meeting shall have the power and duty to determine whether any nomination or other business proposed to be brought before the meeting pursuant to subsection (b) or Article VII, Section 10 was made in accordance with the procedures set forth herein and, if any proposed nomination or business is not in compliance with these By-Laws, to declare that such defective nomination or proposal shall be disregarded.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 4. At each meeting of the members, the polls shall be opened and closed, the proxies and ballots received and taken in charge, and all questions touching the qualification of voters and the validity of proxies and the acceptance or rejection of votes shall be decided by an inspector appointed by the Secretary of the Corporation before the meeting, or in default thereof by the chairman of the meeting. If the inspector previously appointed fails to attend or refuses or is unable to serve, a substitute shall be appointed by the chairman of the meeting. The inspector shall not be a Governor, officer, or employee of the Corporation or a director, officer, partner, or employee of an Corporation subsidiary or member.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Sec. 5. The chairman of the meeting shall be the Chief Executive Officer of the Corporation or his or her designee. The date and time of the opening and closing of the polls for each matter upon which the members will vote at a meeting shall be announced at the meeting by the chairman of the meeting. The Board may adopt by resolution such rules and regulations for the conduct of the meeting of members as it shall deem appropriate. Except to the extent inconsistent with such rules and regulations as adopted by the Board, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations, and procedures and to do all such acts as, in the judgment of the chairman of the meeting, are appropriate for the proper conduct of the meeting. Such rules, regulations, or procedures, whether adopted by the Board or prescribed by the chairman of the meeting, may include, without limitation, the following: (a) the establishment of an agenda or order of business for the meeting; (b) rules and procedures for maintaining order at the meeting and the safety of those present; (c) limitations on attendance at or participation in the meeting to members, their duly authorized and constituted proxies, or such other persons as the chairman of the meeting shall determine; (d) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (e) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board or the chairman of the meeting, meetings of members shall not be required to be held in accordance with the rules of parliamentary procedure.
| Amended by SR-NASD-2007-023 eff. July 30, 2007. Adopted by SR-NASD-97-71 eff. Jan. 15, 1998. |
Notwithstanding anything herein to the contrary, to the extent there is any inconsistency between the other provisions of these By-Laws, including, without limitation, Sections 1, 4, 5 and 9 of Article VII hereof, and this Article XXII, the provisions of this Article XXII shall govern as of Closing and for the Transitional Period to the fullest extent permitted by applicable law:
| Adopted by SR-NASD-2007-023 eff. July 30, 2007. |
Sec. 1. The Board shall be the governing body of the Corporation and, except as otherwise provided by applicable law, the Restated Certificate of Incorporation, or these By-Laws, shall be vested with all powers necessary for the management and administration of the affairs of the Corporation and the promotion of the Corporation's welfare, objects, and purposes; provided, however, that (i) during the Transitional Period, the Board, after consultation with the Chief Executive Officer of the Corporation, shall have the exclusive authority to appoint any Lead Governor of the Corporation, (ii) during the Transitional Period, the Board, after receiving the recommendation of the Chief Executive Officer, shall have the exclusive authority to appoint the Chair of the Finance Committee and (iii) during the Transitional Period, the Nominating Committee will be jointly populated by the Chief Executive Officer and the Chief Executive Officer of NYSE Regulation, Inc. as of Closing (or his duly appointed or elected successor as Chair of the Board), subject to ratification of the appointees by the Board.
| Adopted by SR-NASD-2007-023 eff. July 30, 2007. |
Sec. 2. (a) As of Closing, and for the Transitional Period, the Board shall consist of 23 authorized members, consisting of (i) the Chief Executive Officer of the Corporation, (ii) the Chief Executive Officer of NYSE Regulation, Inc., (iii) eleven Public Governors, (iv) a Floor Member Governor, an Independent Dealer/Insurance Affiliate Governor and an Investment Company Affiliate Governor and (v) three Small Firm Governors, one Mid-Size Firm Governor and three Large Firm Governors; provided, however that the Board shall not include such Small Firm Governors, Mid-Size Firm Governor or Large Firm Governors, but rather shall include three persons, who immediately prior to the Closing are Industry Governors, selected by the Board in office prior to the Closing, three persons, who immediately prior to the Closing qualified as Industry Governors pursuant to the By-Laws in existence prior to the Closing, selected by the Board of Directors of NYSE Group, Inc. and one person, who immediately prior to the Closing qualified as an Industry Governor pursuant to the By-Laws in existence prior to the Closing, selected by the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing jointly, until the election of such Small Firm Governors, Mid-Size Firm Governor and Large Firm Governors at the first annual meeting of members following the Closing (which shall be held as soon as practicable after the Closing).
(b) During the Transitional Period, the Chair shall be the Chief Executive Officer of NYSE Regulation, Inc. as of Closing so long as he remains a Governor. In the event the Chief Executive Officer of NYSE Regulation, Inc. as of the Closing ceases to be Chair during the Transitional Period, subject to the Restated Certificate of Incorporation and these By-Laws, the Chair shall be selected by the NYSE Group Committee from among its members; provided that the Chair so selected shall not be a member of the Board of Directors of NYSE Group, Inc.
| Adopted by SR-NASD-2007-023 eff. July 30, 2007. |
Sec. 3. Upon the Closing, the term of office of each Governor in office immediately prior to the Closing who is not to be a Governor as of Closing pursuant to this Article XXII shall automatically, and without any further action, terminate, and such persons shall no longer be members of the Board of Governors.
The Chief Executive Officer shall serve as a Governor until a successor is elected, or until death, resignation, or removal.
The Chief Executive Officer of NYSE Regulation, Inc. as of Closing shall serve as a Governor during the Transitional Period, until death, resignation, or removal; provided, however, in the event of a vacancy during the Transitional Period with respect to this Governor position by virtue of death, resignation or removal, the then Chief Executive Officer of NYSE Regulation, Inc. shall serve as a Governor for the remainder of the Transitional Period, until death, resignation or removal; provided, further however, a person who becomes a Governor pursuant to the immediately preceding proviso shall not be qualified to serve as Chair.
Effective as of Closing, the Board of Directors of NYSE Group, Inc. shall appoint the NYSE Public Governors, the Board in office prior to the Closing shall appoint the NASD Public Governors and the Board of Directors of NYSE Group, Inc. and the Board in office prior to the Closing jointly shall appoint the Joint Public Governor.
The Public Governors appointed in accordance with the preceding paragraph shall hold office for the Transitional Period, or until death, resignation, disqualification, or removal. In the event of any vacancy among the NYSE Public Governors, the Joint Public Governor or NASD Public Governors during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a vacant NYSE Public Governor position, such vacancy shall only be filled by the Board, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of a vacant Joint Public Governor position or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of a vacant NASD Public Governor position.
Effective as of Closing, the Board of Directors of NYSE Group, Inc. shall appoint the Floor Member Governor, the Board of Governors in office prior to the Closing shall appoint the Independent Dealer/Insurance Affiliate Governor and the Board of Directors of NYSE Group, Inc. and the Board of Governors in office prior to the Closing jointly shall appoint the Investment Company Affiliate Governor.
The Floor Member Governor, the Investment Company Affiliate Governor and the Independent Dealer/Insurance Affiliate Governor appointed in accordance with the preceding paragraph shall hold office for the Transitional Period, or until death, resignation, disqualification, or removal. In the event of any vacancy among the Floor Member Governor, the Investment Company Affiliate Governor or the Independent Dealer/Insurance Affiliate Governor during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a Floor Member Governor vacancy, such vacancy shall only be filled by the Board, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of an Investment Company Affiliate Governor vacancy or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of an Independent Dealer/Insurance Affiliate Governor vacancy.
Three Large Firm Governors, three Small Firm Governors and one Mid-Size Governor shall be elected as Governors at the first annual meeting of members following the Closing (the "Initial Member Elected Governors"). The Initial Member Elected Governors shall hold office until the first annual meeting of members following the Transitional Period, or until a successor is duly elected and qualified, or until death, resignation, disqualification, or removal.
In the event of any vacancy among the Large Firm Governors, the Mid-Size Firm Governor or the Small Firm Governors during the Transitional Period, such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NYSE Group Committee in the case of a Large Firm Governor vacancy, such vacancy shall only be filled by the Board, and nominations for persons to fill such vacancy shall be made by the Nominating Committee, in the case of a Mid-Size Firm Governor vacancy or such vacancy shall only be filled by, and nominations for persons to fill such vacancy shall be made by, the NASD Group Committee in the case of a Small Firm Governor vacancy; provided, however, that in the event the remaining term of office of any Large Firm, Mid-Size Firm or Small Firm Governor position that becomes vacant is for more than 12 months, nominations shall be made as set forth above in this paragraph, but such vacancy shall be filled by the members entitled to vote thereon at a meeting thereof convened to vote thereon.
Upon the expiration of the Transitional Period, the term of office of the Chief Executive Officer of NYSE Regulation, Inc. as a member of the Board shall automatically, and without any further action, terminate, such person shall no longer be a member of the Board and the authorized number of members of the Board shall automatically be reduced by one.
| Adopted by SR-NASD-2007-023 eff. July 30, 2007. |
Sec. 4. In the case of the first annual meeting of members following the Closing, nominations shall be by the Board of Directors of NYSE Group, Inc. with respect to Large Firm Governors, jointly by the Board of Directors of NYSE Group, Inc. and the Board in office prior to the Closing with respect to the Mid-Size Firm Governor and by the Board in office prior to the Closing with respect to Small Firm Governors, instead of the Nominating Committee.
| Adopted by SR-NASD-2007-023 eff. July 30, 2007. |
Assessments and fees pursuant to the provisions of Article VI of the By-Laws of the Corporation shall be determined on the following basis.
| Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Amended by SR-NASD-2002-162 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. |
(a) Recovery of cost of services. FINRA shall, in accordance with this section, collect member regulatory fees that are designed to recover the costs to FINRA of the supervision and regulation of members, including performing examinations, financial monitoring, and policy, rulemaking, interpretive, and enforcement activities. FINRA shall periodically review these revenues in conjunction with these costs to determine the applicable rate. FINRA shall publish notices of the fees and adjustments to the assessment rates applicable under this section.
(b) Each member shall be assessed a Trading Activity Fee for the sale of covered securities.
(1) Covered Securities. For purposes of the rule, covered securities shall mean:
(A) All exchange registered securities wherever executed (except debt securities that are not TRACE-Eligible Securities);
(B) All other equity securities traded otherwise than on an exchange;
(C) All security futures wherever executed;
(D) All "TRACE-Eligible Securities" wherever executed, provided that the transaction also is a "Reportable TRACE Transaction," as these terms are defined in Rule 6710; and
(E) All municipal securities subject to MSRB reporting requirements.
(2) Transactions exempt from the fee. The following shall be exempt from the Trading Activity Fee:
(A) Transactions in securities offered pursuant to an effective registration statement under the Securities Act of 1933 (except transactions in put or call options issued by the Options Clearing Corporation) or offered in accordance with an exemption from registration afforded by Section 3(a) or 3(b) thereof, or a rule thereunder;
(B) Transactions by an issuer not involving any public offering within the meaning of Section 4(2) of the Securities Act of 1933 (except any "Reportable TRACE Transaction");
(C) The purchase or sale of securities pursuant to and in consummation of a tender or exchange offer;
(D) The purchase or sale of securities upon the exercise of a warrant or right (except a put or call), or upon the conversion of a convertible security;
(E) Transactions that are executed outside the United States and are not reported, or required to be reported, to a transaction reporting association as defined in SEC Rule 600(b)(81) and any approved plan filed in accordance with SEC Rule 11Aa3-1 or SEC Rule 601;
(F) Proprietary transactions by a firm that is a member of both FINRA and a national securities exchange, effected in its capacity as an exchange specialist or market maker, that are subject to Securities Exchange Act of 1934, Section 11(a) and Rule 11a1-1(T)(a) thereunder; however this exemption does not apply to other transactions permitted by Section 11(a) such as bona fide arbitrage or hedge transactions;
(G) Transactions by a firm that is a floor based broker and that is a member of both FINRA and a national securities exchange provided that the floor based broker qualifies for exemption from FINRA membership under Exchange Act Rule 15b9-1;
(H) Transactions in conventional options;
(I) Transactions in options and futures involving narrow and broad based indexes;
(J) Transactions in security futures held in futures accounts;
(K) Proprietary transactions in TRACE-Eligible Securities by a firm that is a member of both FINRA and a national securities exchange and that are effected in the firm's capacity as an exchange specialist or exchange market maker;
(L) Transactions in U.S. Treasury Securities, as that term is defined in Rule 6710; and
(M) Transactions by a proprietary trading firm effected on a national securities exchange of which the proprietary trading firm is a member. For purposes of this subparagraph (M), a “proprietary trading firm” is a member that (i) trades exclusively its own capital; (ii) does not have “customers,” which shall include any person, other than a broker or dealer, with whom the member engages, or within the past six months has engaged, in securities activities; and (iii) conducts all trading through the firm’s accounts by traders that are owners of, employees of, or contractors to the firm, or employees of an affiliate of the firm.
FINRA may exempt other securities and transactions as it deems appropriate.
(3) Fee Rates*
(A) Each member shall pay to FINRA a fee per share for each sale of a covered equity security.
(B) Each member shall pay to FINRA a fee per contract for each sale of an option.
(C) Each member shall pay to FINRA a fee for each round turn transaction (treated as including one purchase and one sale of a contract of sale for future delivery) of a security future.
(D) Each member shall pay to FINRA a fee per bond for each sale of a covered TRACE-Eligible Security (other than an Asset-Backed Security, as that term is defined in Rule 6710) and/or municipal security.
(E) Each member shall pay to FINRA a fee based on the reported value of the sale of an Asset-Backed Security, as that term is defined in Rule 6710.
(4) Reporting of Transactions. Members shall report to FINRA the aggregate share, bond, contract, and/or round turn volume of sales of covered securities in a manner as prescribed by FINRA from time to time.
(c) Subject to paragraph (d), each member shall pay an annual Gross Income Assessment equal to the greater of:
(1) the total of:
(A) $1,200.00 on annual gross revenue up to $1 million;
(B) 0.1732% of annual gross revenue greater than $1 million up to $25 million;
(C) 0.3705% of annual gross revenue greater than $25 million up to $50 million;
(D) 0.0738% of annual gross revenue greater than $50 million up to $100 million;
(E) 0.0520% of annual gross revenue greater than $100 million up to $5 billion;
(F) 0.0566% of annual gross revenue greater than $5 billion up to $25 billion; and
(G) 0.1219% of annual gross revenue greater than $25 billion; or
(2) The average Gross Income Assessment from the preceding three calendar years, to be determined by adding the Gross Income Assessment calculation pursuant to paragraph (c)(1) to the actual Gross Income Assessment in the preceding two calendar years, then dividing by three.
The rate structure set forth in paragraph (c)(1) will be implemented over a three year period beginning in 2008 in such manner as specified by FINRA.
For the purpose of paragraph (c)(1), each member is to report annual gross revenue as defined in Section 2 of this Schedule for the preceding calendar year.
(d) Notwithstanding paragraph (c)(2), a member whose annual gross revenue does not exceed $25 million shall pay an annual Gross Income Assessment equal to amount set forth in paragraphs (c)(1).
(e) Each member shall pay an annual Personnel Assessment equal to:
(1) $210.00 per principal and each representative up to five principals and representatives as defined below;
(2) $200.00 per principal and each representative for six principals and representatives up to twenty-five principals and representatives as defined below; or
(3) $190.00 per principal and each representative for twenty-six or more principals and representatives as defined below.
A principal or representative is defined as a principal or representative in the member's organization who is registered with FINRA as of December 31st of the prior fiscal year.
* Trading Activity Fee rates are as follows: Each member shall pay to FINRA: (1) $0.000166 per share for each sale of a covered equity security, with a maximum charge of $8.30 per trade; (2) $0.00279 per contract for each sale of an option; (3) $0.00011 per contract for each round turn transaction of a security future, provided there is a minimum charge of $0.014 per round turn transaction; (4) $0.00105 per bond for each sale of a covered TRACE-Eligible Security (other than an Asset-Backed Security) and/or municipal security, with a maximum charge of $1.05 per trade; and (5) $0.00000105 times the value, as reported to TRACE, of a sale of an Asset-Backed Security, with a maximum charge of $1.05 per trade. In addition, if the execution price for a covered security is less than the Trading Activity Fee rate ($0.000166 for covered equity securities, $0.00279 for covered option contracts, or $0.014 for a security future) on a per share, per contract, or round turn transaction basis then no fee will be assessed.
| Amended by SR-FINRA-2020-032 eff. Jan. 1, 2024. Amended by SR-FINRA-2023-009 eff. Nov. 6, 2023. Amended by SR-FINRA-2020-032 eff. Jan. 1, 2023. Amended by SR-FINRA-2020-032 eff. Jan. 1, 2022. Amended by SR-FINRA-2016-027 eff. July 10, 2017. Amended by SR-FINRA-2014-046 eff. Jan. 1, 2015. Amended by SR-FINRA-2012-044 eff. Oct. 1, 2012. Amended by SR-FINRA-2012-023 eff. July 1, 2012. Amended by SR-FINRA-2012-008 eff. March 1, 2012. Amended by SR-FINRA-2011-071 eff. March 1, 2012. Amended by SR-FINRA-2011-020 eff. July 1, 2011. Amended by SR-FINRA-2011-004 eff. May 16, 2011. Amended by SR-FINRA-2010-046 eff. Nov. 1, 2010. Amended by SR-FINRA-2009-057 eff. Jan. 1, 2010. Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Amended by SR-NASD-2006-091 eff. March 5, 2007. Amended by SR-NASD-2003-201 partially effective Nov. 1, 2004 and fully effective April 1, 2005. Amended by SR-NASD-2003-93 eff. Sept. 1, 2003. Amended by SR-NASD-2002-148 eff. May 30, 2003. Amended by SR-NASD-2002-99 eff. Jan 1, 2003. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-147 eff. Oct. 18, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Amended by SR-NASD-2002-65 eff. June 27, 2002. Amended by SR-NASD-97-62 eff. Aug. 22, 1997. Amended by SR-NASD-96-57 eff. Jan. 2, 1997. Amended by SR-NASD-95-52 eff. Nov. 3, 1995. Amended by SR-NASD-95-23 eff. July 11, 1995. Amended by SR-NASD-94-58 eff. Nov. 30, 1994. Amended by SR-NASD-94-29 eff. May 23, 1994. Amended by SR-NASD-94-03 eff. Jan. 14, 1994. Amended by SR-NASD-93-71 eff. Dec. 2, 1993. Amended by SR-NASD-93-30 eff. July 4, 1993. Amended by SR-NASD-92-24 eff. July 23, 1992. Amended by SR-NASD-91-69 eff. Dec. 17, 1991. Amended by SR-NASD-90-66 eff. Jan. 1, 1991. Amended by SR-NASD-89-37 eff. Oct. 1, 1989. Amended by SR-NASD-88-55 eff. Sept. 21, 1989. Amended by SR-NASD-88-41 eff. Oct. 1, 1988. Amended by SR-NASD-87-30 eff. Oct. 1, 1987. Amended by SR-NASD-86-24 eff. Oct. 1, 1986. Amended by SR-NASD-85-23 eff. Oct. 1, 1985. Amended by SR-NASD-84-13 eff. Sept. 6, 1984. Amended by SR-NASD-83-18 eff. Oct. 1, 1983. Amended by SR-NASD-83-7 eff. July 1, 1983 Amended by SR-NASD-79-7 eff. Oct. 1, 1979. Amended by SR-NASD-78-18 eff. Nov. 22, 1978. Amended by SR-NASD-78-01 eff. Oct. 1, 1977. Amended by SR-NASD-76-12 eff. Oct. 1, 1976. Former Schedule A, Sec. 1 amended by SR-NASD-75-01 eff. Dec. 1, 1975. Selected Notices: 83-35, 96-81, 97-62, 02-63, 04-84, 08-19, 09-56, 09-68, 10-56, 11-27, 12-06, 12-31, 12-41, 16-39, 23-16. |
Gross revenue is defined for assessment purposes as total income as reported on FOCUS form Part II or IIA with the following exclusion: commodities income.
| Amended by SR-NASD-2002-99 eff. Dec. 30, 2002. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Amended by SR-NASD-96-15 eff. June 13, 1996. Amended by SR-NASD-94-58 eff. Nov 30, 1994. Amended by SR-NASD-88-41 eff. Oct. 1, 1988. Amended by SR-NASD-83-18 eff. Oct. 1, 1983. Amended by SR-NASD-78-01 eff. Oct. 1, 1977. Amended by SR-NASD-76-12 eff. Oct. 1, 1976. Schedule A, Sec. 5 amended by SR-NASD-75-01 eff. Dec. 1, 1975. Selected Notices: 95-54, 96-43. |
Each member shall be assessed a regulatory transaction fee. The amount shall be determined periodically in accordance with Section 31 of the Act. Transactions assessable under this Section 3 that must be reported to FINRA shall be reported in an automated manner.
| Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Amended by SR-NASD-2006-055 eff. Dec. 1, 2006. Amended by SR-NASD-2004-129 eff. Aug. 20, 2004. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Adopted by SR-NASD-96-57 eff. Jan. 2, 1997. Selected Notices: 04-63, 06-39. |
(a)(1) Each member shall be assessed a registration fee of $75.00 and a branch office system processing fee of $75.00 upon the registration of each branch office, as defined in the By-Laws.
(2) FINRA shall waive, for the first branch office registered by a member, payment of the $75.00 registration fee and the $75.00 branch office system processing fee (where such fees have been assessed pursuant to paragraph (a)(1)).
(3) Each member also shall be assessed:
(A) an annual registration fee of:
(i) $175, for each of the first 250 branch offices registered by the member;
(ii) $150, for each of branch offices 251 to 500 registered by the member;
(iii) $125, for each of branch offices 501 to 1,000 registered by the member;
(iv) $100, for each of branch offices 1,001 to 2,000 registered by the member;
(v) $75, for every branch office greater than 2,000 registered by the member; and
(B) an annual branch office system processing fee of $75.00 per registered branch.
(4) FINRA shall waive, for one branch office per member per year, payment of the $175 annual registration fee (where such fee has been assessed pursuant to paragraph (a)(3)(A)(i) and the $75.00 annual branch office system processing fee assessed pursuant to paragraph (a)(3)(B).
(b) FINRA shall assess each member a fee of:
(1) $125.00 for each initial Form U4 filed by the member with FINRA for the registration of a representative or principal, except that the following discounts shall apply to the filing of Forms U4 to transfer the registration of representatives or principals in connection with acquisition of all or a part of a member's business by another member:
|
Number of Registered Personnel Transferred |
Discount |
|
1,000–1,999 |
10% |
|
2,000–2,999 |
20% |
|
3,000–3,999 |
30% |
|
4,000–4,999 |
40% |
|
5,000 and over |
50% |
(2) $40.00 for each initial Form U5 filed by the member with FINRA for the termination of a registered representative or registered principal, plus a late filing fee of $80.00 if the member fails to file the initial Form U5 within 30 days after the date of termination;
(3) $110.00 for the additional processing of each initial or amended Form U4, Form U5 or Form BD that includes the initial reporting, amendment, or certification of one or more disclosure events or proceedings;
(4) $15.00 for processing and posting to the CRD system each set of fingerprints submitted electronically by the member to FINRA, plus any other charge that may be imposed by the United States Department of Justice for processing each set of fingerprints;
(5) $30.00 for processing and posting to the CRD system each set of fingerprint cards submitted in non-electronic format by the member to FINRA, plus any other charge that may be imposed by the United States Department of Justice for processing each set of fingerprints;
(6) $30.00 for processing and posting to the CRD system each set of fingerprint results and identifying information that have been processed through another self-regulatory organization and submitted by a member to FINRA;
(7) $45.00 annually for each of the member's registered representatives and principals for system processing; and
(8) 10% of a member's final annual renewal assessment or $100, whichever is greater, with a maximum charge of $5,000, if the member fails timely to pay the amount indicated on its preliminary annual renewal statement.
(c) The following fees shall be assessed to each individual who takes an examination as described below. These fees are in addition to the registration fee described in paragraph (b) and any other fees that the owner of an examination that FINRA administers may assess.
| Examination Number | Examination Name | Examination Fee |
| N/A | Securities Industry Essentials (SIE) Examination | $80 |
| Series 4 | Registered Options Principal Examination | $155 |
| Series 6 | Investment Company Products and Variable Contracts Representative Examination | $75 |
| Series 7 | General Securities Representative Examination | $300 |
| Series 9 | General Securities Sales Supervisor Examination — Options Module | $130 |
| Series 10 | General Securities Sales Supervisor Examination — General Module | $175 |
| Series 14 | Compliance Official Examination | $350 |
| Series 16 | Supervisory Analyst Examination | $245 |
| Series 22 | Direct Participation Programs Representative Examination | $60 |
| Series 23 | General Securities Principal Examination — Sales Supervisor Module | $105 |
| Series 24 | General Securities Principal Examination | $175 |
| Series 26 | Investment Company Products and Variable Contracts Principal Examination | $150 |
| Series 27 | Financial and Operations Principal Examination | $175 |
| Series 28 | Introducing Broker-Dealer Financial and Operations Principal Examination | $150 |
| Series 39 | Direct Participation Programs Principal Examination | $100 |
| Series 50 | Municipal Advisor Representative Examination | $115 |
| Series 51 | Municipal Fund Securities Limited Principal Examination | $105 |
| Series 52 | Municipal Securities Representative Examination | $110 |
| Series 53 | Municipal Securities Principal Examination | $115 |
| Series 54 | Municipal Advisor Principal Examination | $115 |
| Series 57 | Securities Trader Examination | $80 |
| Series 79 | Investment Banking Representative Examination | $300 |
| Series 82 | Private Securities Offering Representative Examination | $60 |
| Series 86 | Research Analyst Examination — Analysis | $225 |
| Series 87 | Research Analyst Examination — Regulatory | $150 |
| Series 99 | Operations Professional Examination | $60 |
(1) Persons for whom any qualification examination is waived pursuant to Rule 1210.03 shall be assessed as an application fee the examination fee for each qualification examination so waived.
(2) There shall be an additional service charge of $15.00 for any examination or Regulatory Element session taken in a test center located outside the territorial limits of the United States.
(3) There shall be a service charge equal to the examination or Regulatory Element session fee assessed to each individual who, having made an appointment for an administration of an examination listed above or a test center-based Regulatory Element session, fails to timely appear for such appointment or cancels or reschedules such appointment within two business days prior to the appointment date.
(4) There shall be a service charge equal to one-half of the examination or Regulatory Element session fee assessed to each individual who, having made an appointment for an administration of an examination listed above or a test center-based Regulatory Element session, cancels or reschedules such appointment three to 10 business days prior to the appointment date.
(d) In the event a member believes it should not be required to pay the late filing fee, it shall be entitled to a hearing in accordance with the procedures set forth in the Rule 9520 Series.
(e)(1) In addition to any dues or fees otherwise payable, each applicant for membership shall be assessed an application fee, based on the number of registered persons proposed to be associated with the applicant at the time the application is filed, as outlined in the tables below:
| Number of Registered Persons Associated with Applicant | Small | Medium | Large |
| Tier 1 | 1–10 | 151–300 | 501–1,000 |
| Tier 2 | 11–100 | 301–500 | 1,001–5,000 |
| Tier 3 | 101–150 | N/A | >5,000 |
| Application Fee per Tier | Small | Medium | Large |
| Tier 1 | $7,500 | $25,000 | $35,000 |
| Tier 2 | $12,500 | $30,000 | $45,000 |
| Tier 3 | $20,000 | N/A | $55,000 |
(2) Each applicant for membership also shall be assessed an additional $5,000 if the applicant will be engaging in any clearing and carrying activity.
(f)(1) There shall be a session fee of $55 assessed to each individual who completes the Regulatory Element of the Continuing Education requirements pursuant to FINRA rules.
(2) There shall be assessed to each individual electing to participate in the continuing education program under Rule 1240(c) a fee of $100 for each year that such individual is participating in the program. Individuals who elect to participate in the program within two years from the termination of a registration would also be assessed any accrued annual fee.
(g)(1) Unless a specific temporary extension of time has been granted, there shall be imposed upon each member required to file reports, as designated by this paragraph ("Designated Reports"), a fee of $100 for each day that such report is not timely filed. The fee will be assessed for a period not to exceed 10 business days. Requests for such extension of time must be submitted to FINRA at least three business days prior to the due date; and
(2) Any report filed pursuant to this Rule containing material inaccuracies or filed incompletely shall be deemed not to have been filed until a corrected copy of the report has been resubmitted.
(3) List of Designated Reports:
(A) SEA Rule 17a-5 — Monthly and quarterly FOCUS reports and annual audit reports;
(B) SEA Rule 17a-10 — Schedule I;
(h) FINRA shall assess each member a fee of $100.00 on the first day and $25.00 for each subsequent day, up to a maximum of $1,575, that a new disclosure event or a change in the status of a previously reported disclosure event is not timely filed as required by FINRA on an initial Form U5, an amendment to a Form U5, or an amendment to a Form U4, with such fee to be assessed starting on the day following the last date on which the event was required to be reported.
(i)(1) In addition to any dues or fees otherwise payable, each applicant submitting an application for approval of a change in ownership, control, or business operations shall be assessed an application fee, based on the number of registered persons associated with the applicant (including registered persons proposed to be associated with the applicant upon approval of the application) at the time the application is filed and the type of change in ownership, control, or business operations, as outlined in the tables below:
| Number of Registered Persons Associated with Applicant | Small | Medium | Large |
| Tier 1 | 1–10 | 151–300 | 501–1,000 |
| Tier 2 | 11–100 | 301–500 | 1,001–5,000 |
| Tier 3 | 101–150 | N/A | >5,000 |
| Application Fee per Tier | Small | Medium | Large |
| Merger | |||
| Tier 1 | $7,500 | $25,000 | $50,000 |
| Tier 2 | $12,500 | $30,000 | $75,000 |
| Tier 3 | $20,000 | N/A | $100,000 |
| Material Change | |||
| Tier 1 | $5,000 | $20,000 | $35,000 |
| Tier 2 | $10,000 | $25,000 | $50,000 |
| Tier 3 | $15,000 | N/A | $75,000 |
| Ownership Change | $5,000 | $10,000 | $15,000 |
| Transfer of Assets | $5,000 | $10,000 | $15,000 |
| Acquisition | $5,000 | $10,000 | $15,000 |
(2) If an applicant's application for approval of a change in ownership, control, or business operations involves more than one type of application identified in the "application fee per tier and application type" table in paragraph (i)(1) of this section, the application fee shall be the highest amount of the applicable fees (e.g., the application fee for an applicant associated with 1–10 registered persons filing an application involving a merger and material change would be $7,500).
(3) FINRA shall waive the fee assessed pursuant to paragraph (i)(1) for a continuing membership application where FINRA determines that such application is proposing less significant changes that do not require substantial staff review. For example, a continuing membership application may qualify for a fee waiver under this paragraph (i)(3) where the proposed change:
(A) does not make any day-to-day changes in the applicant's business activities, management, supervision, assets, or liabilities, and the applicant is only proposing a change in the:
(i) applicant's legal structure (e.g., changing from a corporation to an LLC);
(ii) equity ownership, partnership capital, or other ownership interest in an applicant held by a corporate legal structure that is due solely to a reorganization of ownership or control of the applicant within the corporate legal structure (e.g., reorganizing only to add a holding company to the corporate legal structure's ownership or control chain of the applicant); or
(iii) percentage of ownership interest or partnership capital of an applicant's existing owners or partners resulting in an owner or partner owning or controlling 25 percent or more of the ownership interest or partnership and that owner or partner has no disclosure or disciplinary issues in the preceding five years; or
(B) is filed in connection with a direct or indirect acquisition or transfer of 25 percent or more in the aggregate of the applicant's assets or any asset, business, or line of operation that generates revenues composing 25 percent or more in the aggregate of the applicant's earnings, measured on a rolling 36-month basis, where the applicant also is ceasing operations as a broker or dealer (including filing a Form BDW with the SEC); and there are either:
(i) no pending or unpaid settled customer related claims (including, but not limited to, pending or unpaid settled arbitration or litigation actions) against the applicant or any of its associated persons; or
(ii) pending or unpaid settled customer related claims (including, but not limited to, pending or unpaid settled arbitration or litigation actions) against the applicant or its associated persons, but the applicant demonstrates in the continuing membership application its ability to satisfy in full any unpaid customer related claim (e.g., sufficient capital or escrow funds, proof of adequate insurance for customer related claims).
| Amended by SR-FINRA-2021-034 eff. Dec. 30, 2021 and Jan. 31, 2022. Amended by SR-FINRA-2020-032 eff. Jan. 1, 2022. Amended by SR-FINRA-2021-025 eff. Sept. 27, 2021. Amended by SR-FINRA-2019-009 eff. May 8, 2019. Amended by SR-FINRA-2018-033 eff. Oct. 1, 2018. Amended by SR-FINRA-2016-025 eff. July 1, 2016. Amended by SR-FINRA-2015-044 eff. Jan. 4, 2016. Amended by SR-FINRA-2015-015 eff. Oct. 1, 2015. Amended by SR-FINRA-2015-031 eff. Sept. 21, 2015. Amended by SR-FINRA-2015-027 eff. Aug. 24, 2015. Amended by SR-FINRA-2015-006 eff. Apr. 1, 2015. Amended by SR-FINRA-2013-015 eff. Feb. 5, 2013. Amended by SR-FINRA-2012-030 eff. Jan. 2, 2013. Amended by SR-FINRA-2012-031 eff. Jan. 2, 2013. Amended by SR-FINRA-2012-031 eff. July 23, 2012. Amended by SR-FINRA-2012-009 eff. Apr. 2, 2012. Amended by SR-FINRA-2011-042 eff. Oct. 17, 2011. Amended by SR-FINRA-2011-026 eff. Sept. 1, 2011. Amended by SR-FINRA-2010-016 eff. April 9, 2010. Amended by SR-FINRA-2008-067 eff. Feb. 8, 2010. Amended by SR-FINRA-2009-071 eff. Jan. 4, 2010. Amended by SR-FINRA-2009-056 eff. Nov. 2, 2009. Amended by SR-FINRA-2008-053 eff. Jan. 2, 2009. Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Amended by SR-FINRA-2008-035 eff. July 30, 2007. Amended by SR-NASD-2006-065 eff. July 3, 2006. Amended by SR-NASD-2005-133 eff. Jan. 1, 2006. Amended by SR-NASD-2005-132 eff. Jan. 1, 2006. Amended by SR-NASD-2004-145 eff. Jan. 1, 2005. Amended by SR-NASD-2004-087 eff. June 7, 2004. Amended by SR-NASD-2004-049 eff. Mar. 30, 2004. Amended by SR-NASD-2003-192 eff. Feb. 11, 2004. Amended by SR-NASD-2004-115 eff. Jan. 1, 2004. Amended by SR-NASD-2003-148 eff. Oct. 3, 2003. Amended by SR-NASD-2003-109 eff. July 10, 2003. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-147 eff. Oct. 18, 2002. Amended by SR-NASD-2002-100 eff. July 25, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Amended by SR-NASD-00-39 eff. Sept. 10, 2001. Amended by SR-NASD-99-38 eff. Sept. 15, 1999. Amended by SR-NASD-99-43 eff. Sept. 7, 1999. Amended by SR-NASD-98-77 eff. Jan 1, 1999. Amended by SR-NASD-98-95 eff. Dec 21, 1998. Amended by SR-NASD-96-53 eff. Jan 3, 1997. Amended by SR-NASD-95-32 eff. July 26, 1995. Amended by SR-NASD-95-23 eff. July 1, 1995. Amended by SR-NASD-94-58 eff. Dec. 9, 1994. Amended by SR-NASD-94-06 eff. Feb. 9, 1994. Amended by SR-NASD-94-05 eff. Jan. 21, 1994. Schedule A, Sec. 2 amended eff. May 20, 1975; May 30, 1979; Oct. 1, 1979; Nov. 23, 1982; Oct. 1, 1985; Aug. 14, 1987; Apr. 4, 1990 (eff. May 1, 1990); May 3, 1990; Aug. 13, 1990; Mar. 1, 1991; July 16, 1991; Nov. 4, 1992; July 13, 1993. Selected Notices: 95-59, 98-89; 99-75, 01-54, 04-25, 08-61, 09-67, 09-71, 11-36, 12-16, 12-32, 13-11, 15-28, 15-45, 18-27. |
Two or more members under substantially the same ownership or control shall be required to pay (1) only one personnel assessment and one system processing fee annually for those individuals employed by more than one of the members; (2) only one fee annually for each branch office registered at the same location by more than one of the members; and (3) one registration fee, one fingerprint processing fee, and one termination fee applicable to each applicant registered or terminated simultaneously with two or more members under substantially the same ownership or control. To establish their eligibility to receive the reduction in fees described herein, members must provide FINRA with information as requested by FINRA and in the format specified by FINRA prior to FINRA's assessment of such fees.
| Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Amended by SR-NASD-2003-194 eff. Jan. 6, 2004. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Amended by SR-NASD-98-77 eff. Jan 1, 1999. Selected Notice: 98-89. |
(a) The assessment of a firm, which is not a member throughout FINRA's full calendar year from January 1 to December 31, shall be based upon the number of quarter years of membership. The proration for a new member shall include the quarter year in which the member is admitted to membership. The proration for a member which resigns shall include the quarter year in which the member's letter of resignation is received in FINRA's Executive Office.
(b) A member that is a successor organization to a previous member or members shall assume the unpaid balance of the assessments of its predecessor or predecessors and its next assessment shall be determined, if applicable, upon the assessment data of its predecessors. Such successor member shall not be required to re-register branch offices and personnel of predecessor members, but shall be required to pay registration fees therefor. Whether a member is the successor organization to a previous member or members shall be determined by FINRA upon a consideration of the terms and conditions of the particular merger, consolidation, reorganization, or succession. A member that has simply acquired the personnel and offices of another member under circumstances that do not constitute the member a successor organization shall not be required to assume the unpaid assessments of the other member. Such non-successor member shall be required to re-register the branch offices and personnel acquired from the other member and pay applicable registration fees.
| Amended by SR-FINRA-2012-030 eff. Jan. 2, 2013. Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Schedule A, Sec. 4 added by SR-NASD-75-01 eff. Dec. 1, 1975. Selected Notices: 95-94, 96-43, 08-19, 12-32. |
(a) There shall be a fee imposed for the filing of initial documents relating to any offering filed with FINRA pursuant to the Corporate Financing Rule equal to: (1) $500 plus .015% of the proposed maximum aggregate offering price or other applicable value of all securities registered on an SEC registration statement or included on any other type of offering document (where not filed with the SEC), but shall not exceed $225,500; or (2) $225,500 for an offering of securities on an automatically effective Form S-3 or F-3 registration statement filed with the SEC and offered pursuant to Securities Act Rule 415 by a Well-Known Seasoned Issuer as defined in Securities Act Rule 405. The amount of the filing fee may be rounded to the nearest dollar.
(b) There shall be an additional fee imposed for the filing of any amendment or other change to the documents initially filed with FINRA pursuant to the Corporate Financing Rule equal to .015% of the net increase in the maximum aggregate offering price or other applicable value of all securities registered on an SEC registration statement, or any related Securities Act Rule 462(b) registration statement, or reflected on any Securities Act Rule 430A prospectus, or included on any other type of offering document. However, the aggregate of all filing fees paid in connection with an SEC registration statement or other type of offering document shall not exceed $225,500.
| Amended by SR-FINRA-2012-029 eff. July 2, 2012. Amended by SR-FINRA-2008-001 eff. Jan 1, 2008. Amended by SR-NASD-2007-006 eff. Feb. 26, 2007. Amended by SR-NASD-2004-177 eff. Jan. 1, 2005. Amended by SR-NASD-2002-99 eff. Dec. 30, 2002. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Amended by SR-NASD-99-01 eff. May 17, 1999. Amended by SR-NASD-98-87 eff. Nov. 23, 1998. Amended by SR-NASD-94-12 eff. Mar. 7, 1994. Amended eff. Sept. 7, 1989 and Apr. 15, 1992. Schedule A, Sec. 6 added eff. May 25, 1970. Selected Notices: 88-81, 99-50, 04-91, 07-05, 12-32. |
(a) There shall be a service charge imposed on all members who file with the association a request for an extension of time pursuant to the provisions of Section 220.4(c)(3) of Regulation T and/or paragraph (n) of Rule 15c3-3 under the Act.
(b) The service charge for processing each initial extension of time request and for all subsequent extension of time requests (1) involving the same transaction under Regulation T and/or (2) involving an extension of time previously granted pursuant to SEC Rule 15c3-3(n) shall be $4.00 per request.
| Amended by SR-NASD-2006-063 eff. July 1, 2006. Amended by SR-NASD-2002-99 eff. Dec. 30, 2002. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Amended Oct. 1, 1979 and Sept. 7, 1989. Schedule A, Sec. 7 added eff. Oct. 1, 1974. |
Section 9 — Subscription Charges for Registration Batch Filing/Data Download Via the Web CRD Electronic File Transfer (EFT) System
(a) Each firm electing to subscribe to the Web CRD Electronic File Transfer (EFT) System for registration batch filing and/or data download will be assessed an annual subscription fee based on the type of service that the firm uses. The fee schedule to be paid by each firm is as follows:
(1) Data Download — $1,800.00
(2) Form Filing — $3,600.00
(3) Data Download and Form Filing — $4,800.00
| Amended by SR-NASD-2003-18 effective date February 11, 2003 (implementation date March 24, 2003). Amended by SR-NASD-2002-99 eff. Dec. 30, 2002. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Renumbered as Sec. 9 by SR-NASD-85-23 eff. Oct. 1, 1985. Amended by SR-NASD-84-13 eff. Sept. 6, 1984. Sec. 10 added by SR-NASD-83-18 eff. Oct. 1, 1983. |
Where there is no provision elsewhere in the By-Laws for specific fees, the corporation may impose and collect compensatory charges for data from its records or for its publications.
| Amended by SR-NASD-2002-99 eff. Dec. 30, 2002. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Renumbered as Sec. 10 eff. Oct. 1, 1985. Schedule A, Sec. 11 added eff. Mar. 19, 1985. |
* * *
Resolution of the Board of Governors
Failure to File Assessment Report with Membership Application
District Committees shall not consider applications for membership and in no event shall an application for membership be approved for admission to membership, until an assessment report has been filed by the applicant.
The President shall notify District Committees when assessment reports have not been filed with the membership applications.
* * *
Resolution of the Board of Governors
Branch Offices
Each member of the Corporation shall immediately advise the Board of Governors of the opening or closing of any branch office of such member.
Each member shall be subject to the fee specified in Schedule A to the By-Laws for each branch office in existence during the fiscal year or part thereof.
* * *
Resolution of the Board of Governors
Expulsion and Revocation for Failure to Pay Dues and Assessments
Article VI, Section 3 of the By-Laws provides that the Board of Governors, after fifteen days notice in writing, may suspend or cancel the membership of any member in arrears in the payment of any dues, assessments or other charges or for failure to furnish any information or reports requested by the Board of Governors pursuant to Article VI, Section 2 of the By-Laws, pertaining to furnishing any information or reports in connection with the determination of the amount of admission fees, dues, assessments or other charges payable by the members during any given fiscal year; and the Board of Governors deems it necessary and advisable that the President exercise the power granted to the Board of Governors by this provision when he deems it necessary and appropriate.
Therefore, the President of the Association is authorized and empowered to take any and all action permitted by the authority granted to the Board of Governors in Article VI, Section 3 of the By-Laws in respect to the suspension or cancellation of membership.
* * *
Cross Reference:
The procedures for suspension or cancellation of membership are contained in the Rule 9620 Series.
* * *
Resolution of the Board of Governors
Suspension for Failure to Register Personnel and to Pay Fees
Pursuant to the provisions of Section 3 of Article VI of the Association's By-Laws, the President be and hereby is authorized and directed, after fifteen days notice in writing, to suspend the membership of any member on behalf of the Board of Governors who has not filed appropriate application for registration of Registered Representatives after due notice by registered mail, return receipt requested, and has not paid the prescribed fee; provided that the President shall further notify the Executive Committee of the Board of Governors with respect to such suspension and shall advise the member concerned in writing as to such suspension.
* * *
Cross Reference:
The procedures for suspension or cancellation of membership are contained in the Rule 9620 Series.
* * *
Resolution of the Board of Governors
Fees for Registered Representatives
Each application for registration as a "Registered Representative" or "Registered Principal" filed with the Corporation shall be accompanied by payment of the fee specified in Schedule A of the By-Laws.
Where an applicant for registration as a "Registered Representative" or "Registered Principal" is required to pass an examination in accordance with the provisions of Section 2 of Article II of the By-Laws the application shall be accompanied by payment of such additional fee as specified in Schedule A of the By-Laws.
The registration of a "Registered Representative" or "Registered Principal" of the member shall not become effective unless accompanied by such payment as required above.
In no event shall such fees be refunded.
The President is directed to advise any member who has filed an application for registration of a "Registered Representative" or "Registered Principal" and has not accompanied such application with payment of the required fee or fees as described above that such registration may not become effective until such payment is made.
* * *
| Renumbered by SR-NASD-2002-99 eff. Dec. 30, 2002. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Renumbered by SR-NASD-2002-98 eff. July 24, 2002. Schedule A, Sec. 11 deleted eff. Jan. 5, 1993. |
Section 12 — Application and Annual Fees for Statutorily Disqualified Member Firms, Statutorily Disqualified Applicants for Membership and Member Firms Seeking to Associate with Statutorily Disqualified Individuals
(a) Any member firm, or applicant for membership under Rule 1013 that is subject to a disqualification as set forth in Article III, Section 4 of the By-Laws of the Corporation (1) seeking to enter, or be continued in, membership; or (2) seeking to employ or continuing to employ as an associated person any individual who is subject to a disqualification from association with a member as set forth in Article III, Section 4 of the By-Laws of the Corporation shall, upon the filing of an application pursuant to Article III, Section 3, paragraph (d) of the By-Laws of the Corporation, pay to FINRA a fee of $5,000.00. Any member firm whose application filed pursuant to Article III, Section 3, paragraph (d) of the By-Laws of the Corporation results in a full hearing for eligibility in FINRA pursuant to the Rule 9520 Series, shall pay to FINRA an additional fee of $2,500.00.
(b) Any member firm continuing to employ as an associated person any individual subject to disqualification from association with a member as set forth in Article III, Section 4 of the By-Laws of the Corporation shall pay annually to FINRA a fee of $1,500.00 when such person or individual is classified as a Tier 1 statutorily disqualified individual, and a fee of $1,000.00 when such person or individual is classified as a Tier 2 statutorily disqualified individual.
| Amended by SR-FINRA-2019-009 eff. May 8, 2019. Amended by SR-FINRA-2018-018 eff. May 30, 2018. Amended by SR-FINRA-2015-027 eff. Aug. 24, 2015. Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Amended by SR-NASD-2002-99 eff. Dec. 30, 2002. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Amended by SR-NASD-94-57 eff. Oct. 14, 1994. Amended by SR-NASD-88-3 eff. Feb. 29, 1988. Adopted by SR-NASD-86-1 eff. Jan. 29, 1986. Selected Notices: 86-11, 88-15. |
There shall be a review charge for each and every communication, whether in printed, video or other form, filed with or submitted to FINRA, except for items that are filed or submitted in response to a written request from FINRA's Advertising Regulation Department ("the Department") issued pursuant to the spot check procedures set forth in FINRA rules, as follows: (1) for printed or website material reviewed, $125.00, plus $10.00 for each printed page or webpage reviewed in excess of 10 pages; and (2) for video or audio media, $125.00, plus $10.00 per minute for each minute of tape reviewed in excess of 10 minutes.
Where a member requests expedited review of material submitted to the Department there shall be a review charge of $600.00 per item plus $50.00 for each printed page or webpage reviewed in excess of 10 pages. Expedited review shall be completed within three business days, not including the date the item is received by the Department, unless a shorter or longer period is agreed to by the Department. The Department may, in its sole discretion, refuse requests for expedited review.
| Amended by SR-FINRA-2017-030 eff. Oct. 5, 2017. Amended by SR-FINRA-2013-001 eff. Feb. 4, 2013. Amended by SR-FINRA-2012-028 eff. July 2, 2012. Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Amended by SR-NASD-2004-179 eff. Dec. 8, 2004. Amended by SR-NASD-2002-99 eff. Dec. 30, 2002. Amended by SR-NASD-2002-182 eff. Dec. 24, 2002. Amended by SR-NASD-2002-98 eff. July 24, 2002. Amended by SR-NASD-98-82 eff. Jan. 1, 1999. Amended by SR-NASD-94-21 eff. May 1, 1994. Amended by SR-NASD-89-37 eff. Sept. 7, 1989; Jan. 25, 1991. Adopted by SR-NASD-88-2 eff. Feb. 22, 1988. Selected Notices: 88-14, 91-13, 94-27, 98-97, 12-32, 17-31. |
(a) FINRA shall, in accordance with this Section, allocate, assess, and collect a GASB Accounting Support Fee to fund the annual budget of the Governmental Accounting Standards Board. The GASB Accounting Support Fee is based on the recoverable annual budgeted expenses provided to FINRA by the Governmental Accounting Standards Board, and amounts collected under this Section shall be remitted to the Financial Accounting Foundation.
(b) Except as provided in paragraph (c), each calendar quarter, each member shall pay an assessment to FINRA of its portion of one quarter of the annual GASB Accounting Support Fee amount that reflects the member's portion of the total par value of municipal securities transactions reported by members to the Municipal Securities Rulemaking Board under MSRB Rule G-14(b) in the previous calendar quarter.
(c) If, in a given calendar quarter, a member's GASB Accounting Support Fee assessment is less than $25, the member will not be assessed a GASB Accounting Support Fee for that quarter. The amount not assessed to the member will be reallocated among the other members assessed a GASB Accounting Support Fee for that quarter based on each member's portion of the total par value of municipal securities transactions reported by members to the Municipal Securities Rulemaking Board under MSRB Rule G-14(b) in the previous calendar quarter.
| Adopted by SR-FINRA-2011-073 eff. Feb. 23, 2012. Selected Notice: 12-15. |
(a) FINRA shall, in accordance with this section, collect fees that are designed to recover the costs to FINRA of the supervision and regulation of funding portal members, including the membership process and performing examinations, policy, rulemaking, interpretive and enforcement activities. FINRA shall periodically review funding portal fee revenues in conjunction with these costs to determine the applicable fees and rates. FINRA shall publish notices of the fees and adjustments to the assessment rates applicable under this section.
(b)(1) Each funding portal applicant for membership shall be assessed an application fee of $2,700 at the time Form FP-NMA is filed.
(b)(2) Each funding portal applicant for approval of a change in ownership or control shall be assessed an application fee of $500 at the time Form FP-CMA is filed.
(b)(3) If an application pursuant to paragraph (b)(1) or (b)(2) is rejected as incomplete or is withdrawn by the funding portal applicant in accordance with Funding Portal Rule 110(a)(5) or (a)(7), the application fee shall be refunded less $250, which shall be retained by FINRA as a processing fee.
(c)(1) Each funding portal member shall pay an annual gross income assessment determined in accordance with Section 1(c) of this Schedule A. Gross revenue is defined for assessment purposes as gross revenue as reported on Form FP-Statement of Revenue.
(c)(2) The annual fee of a funding portal that is not a member throughout FINRA's full calendar year from January 1 to December 31 shall be based upon the number of quarter years of membership. The proration for a new funding portal member shall include the quarter year in which the funding portal member is admitted to membership. The proration for a funding portal member that withdraws from membership shall include the quarter year in which the funding portal member's withdrawal from membership is effective.
(c)(3) A funding portal member that is a successor organization to a previous funding portal member or members shall assume the unpaid balance of the assessments of its predecessor or predecessors and its next assessment shall be determined, if applicable, upon the assessment data of its predecessors. Whether a funding portal member is the successor organization to a previous funding portal member or members shall be determined by FINRA upon a consideration of the terms and conditions of the particular merger, consolidation, reorganization, or succession. A funding portal member that has simply acquired the personnel and offices of another funding portal member under circumstances that do not constitute the funding portal member a successor organization shall not be required to assume the unpaid assessments of the other member.
(d) A nonresident funding portal member shall reimburse FINRA for any expenses incurred in connection with examinations of the member to the extent that such expenses exceed the cost of examining a member located within the continental United States in the geographic location most distant from the District Office of appropriate jurisdiction.
(e) FINRA shall assess each funding portal member a fee of $100 on the first day and $25 for each subsequent day, up to a maximum of $1,575, that a new disclosure event or a change in the status of a previously reported matter is not timely filed pursuant to Funding Portal Rule 800(b)(2).
(f)(1) A funding portal member shall pay a fee of $1,500 at the time that it files an application to initiate eligibility proceedings pursuant to Funding Portal Rule 900(b). Any funding portal member whose application results in a full hearing for eligibility in FINRA pursuant to Funding Portal Rule 900(b) shall pay to FINRA an additional fee of $2,500.
(f)(2) A funding portal member that continues to associate with any individual subject to disqualification or otherwise ineligible from association with a member shall pay annually to FINRA a fee of $1,500 when such person or individual is classified as a Tier 1 statutorily disqualified individual, and a fee of $1,000 when such person or individual is classified as a Tier 2 statutorily disqualified individual.
(g) A funding portal member shall pay $15 for processing and posting to the CRD system each set of fingerprints submitted electronically by the member, or $30 if submitted in non-electronic format, to FINRA, plus any other charge that may be imposed by the United States Department of Justice for processing each set of fingerprints.
(h) Request for Data and Publications. Where there is no provision elsewhere in the By-Laws for specific fees, the corporation may impose and collect compensatory charges for data from its records or for its publications.
| Adopted by SR-FINRA-2015-041 eff. Jan. 29, 2016. |
IM-Section 4(b)(1) and (e) Exemption from Certain Registration and Membership Application Fees for Certain NYSE and NYSE American LLC Member Organizations
NYSE and NYSE American LLC member organizations that become members of FINRA pursuant to IM-1013-1 and IM-1013-2, respectively, shall not be assessed the fee set forth in Section 4(b)(1) to Schedule A of the FINRA By-Laws for the initial Form U4 filed by firms for the registration of any representative or principal associated with the member organization at the time a firm submits its application for FINRA membership. Such firms also shall not be assessed the membership application fee set forth in Section 4(e) to Schedule A of the FINRA By-Laws. However, those firms will otherwise remain subject to FINRA’s By-Laws and Schedules to By-Laws, including Schedule A.
| Amended by SR-FINRA-2021-018 eff. July 6, 2021. Amended by SR-FINRA-2008-043 eff. Oct. 1, 2008. Amended by SR-FINRA-2008-001 eff. Jan. 1, 2008. Adopted by SR-NASD-2007-056 eff. Oct. 12, 2007. Selected Notices: 07-52, 08-19 |
IM-Section 4(e) Partial Waiver of Membership Application Fee for Certain Firms Applying Due to Amended SEA Rule 15b9-1
Firms that apply for FINRA membership pursuant to IM-1013-3 shall be assessed one-half the applicable membership application fee set forth in Section 4(e) of Schedule A to the FINRA By-Laws. Those firms will otherwise remain subject to the FINRA By-Laws and Schedules to By-Laws, including Schedule A.
| Adopted by SR-FINRA-2023-014 eff. Oct. 30, 2023. Selected Notice: 23-19. |