The National Association of Securities Dealers, Inc. in a February 13 letter to member firms addressed eleven regulatory topics it will focus on in its forthcoming examinations. The NASD will generally notify a firm 30 days in advance of a routine examination as opposed to the current practice of 14 days advance notice. It has established a liaison program with a District office staff member assigned to each firm as a point of contact for regulatory comments and questions. NASD will verify the accuracy of the Central Registration Depository filings and confirm that filings now required to be made electronically under 11 Securities and Exchange Commission rules have been made. Regulation S-P on customer privacy will be an item of focus. The NASD also will look at the member’s practices in offering hedge funds to customers. Additionally, while NASD Rule 2711 on research reports does not apply to fixed income research, the NASD will check to see if members are following the best practices in this area recommended by the Bond Market Association (subsequently merged into the Securities Industry and Financial Markets Association). Attached to the letter was a listing of previously issued guidelines and the Notices to Members providing guidance in the 11 areas of focus. Also attached was a reference to reports and speeches relating to these 11 areas of focus.

http://www.nasd.com/web/groups/corp_comm/documents/home_page/nasdw_018635.pdf