NASD Issues Guidance Regarding Portability of Investments

NASD recently issued Notice to Members (NTM) 07-06, which provides guidance to member firms regarding recommendations by newly associated registered representatives to replace existing mutual funds and similar holdings with other investments. In particular, NASD addressed issues relating to “nonportable” assets that customers may not be able to transfer from one member firm to another. NTM 07-06 provides that member firms should have procedures in place that are specifically designed to review and evaluate investment recommendations made by newly associated individuals to existing customers relating to mutual funds and variable products.

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