NASD Announces Move to Electronic Processing of New Membership Applications for Broker-Dealers
PDF version Recently, the NASD issued Notice to Members (NTM) 07-20 regarding electronic filing of new membership applications. Specifically, NTM 07-20 states that, effective May 31, 2007, recently approved amendments to the NASD Rules 1012 and 1013 will require new member applicants to electronically complete and submit new membership applications by using online Form NMA and the Electronic Filing System (EFS). NTM 07-20 further indicates that new member applicants may begin voluntarily using online Form NMA and EFS for electronic completion and submission of new membership applications on May 7, 2007.
This most recent move toward a fully electronic membership application process is one of several steps the NASD has taken over the last several years to clarify and simplify its new membership application process. In May 2006, the NASD launched the use of a standardized form of membership application—Form NMA—to assist applicants with the submission of a "substantially complete" application, which is the prerequisite for processing of membership applications by the NASD’s staff. Although at that time the Form NMA was required to be submitted along with supporting documentation in hard copy, it helped clarify exactly what information and documentation should be submitted by an applicant to demonstrate its ability to meet the NASD’s membership standards and additional requirements for different types of proposed business lines (e.g., market making, underwriting). Earlier that same year, the NASD formalized the "regionalization" of processing new membership applications in order to increase standardization for new applicants regardless of which NASD district office maintained jurisdiction over their proposed securities business.
In order to file new membership applications electronically, applicants must create an account on EFS to access, complete, and submit the online Form NMA. The NASD has published the New Membership Application Form NMA Participant Guide on its website to assist applicants with completing the online Form NMA and uploading supporting documentation and required membership forms. Although many required new membership forms may be obtained online, not all forms may be submitted online. For example, Form BD, the New Members Assessment Report, the CRD Entitlement Forms, and fingerprint cards must continue to be submitted by first-class mail, overnight courier or hand delivery along with the requisite membership fees.
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