Introduction

A Brief Background of the U.S. Regulatory Framework

Regulatory Structure of the Securities Industry

Other Regulations

The Role of Self Regulatory Organizations (SROs)

Business Activities of Associated Persons

NASD Conduct Rule 3030: Outside Business Activities

NASD Rule 3040: Private Securities Transactions of an Associated Person

Fee-Based Accounts

Background

SEC Rule 202(a)(11)-1

Issues Raised by Rule 202(a)(11)-1

NASD Requirement that Fee-Based Accounts be Appropriate

Problems Noted by NASD

Supervisory Requirements

Summary