The National Association of Securities Dealers has published a Notice to Members (NTM) 07-14 regarding a rule change the NASD recently filed with the Securities and Exchange Commission. The filing amends Rule 2520 (Margin Requirements) to permit members, on a pilot basis, to margin certain products according to a portfolio margin methodology. Furthermore, the NASD amended Rule 2860 (Options) to require members to furnish to their customers who use a portfolio margin account a disclosure statement and written acknowledgement for use with the proposed portfolio margin program.
The disclosure must be in a format prescribed by the NASD or developed by the member, provided that it contains substantially similar information as in the prescribed NASD format and has received the prior written approval of the NASD. Attachment A to the NTM 07-14 provides the language required to be included in the written disclosure statement and acknowledgement.