NASAA Model Designation Rule
NASAA Model Designation Rule
By: Renee Hall
NASAA adopts Model Rule regarding the Use of Senior Designations
The North American Securities Administrators Association (“NASAA”) released a new model rule adopted on March 20, 2008 intended to stop investment advisers and broker/dealers from misleading senior investors by using inappropriate designations.
The Model rule was promulgated by NASAA to be considered for adoption by the securities administrators in the 50 states, the District of Columbia, the US Virgin Islands, Canada, Mexico and Puerto Rico. As states adopt this model rule, the rule will prohibit the misleading use of senior and retiree designations by individuals while also providing a means for a securities administrator to recognize the use of certain designations conferred by accredited organizations.
NASAA’s model rule represents the result of NASAA and its members focusing national attention on unscrupulous behavior targeting senior investors. The proposed rule, developed by the NASAA Task Force on Senior Designations, was released for public comment in November 2007.
Investment Advisor and broker/dealer firms will need to confirm that the designations used by their representatives are appropriate and conferred by accredited organizations before used by their representatives and on their business cards, stationary, advertising pieces, websites, etc.
Regulatory Compliance will monitor adoption of the model rule as announcements are put forth by various states or the NASAA. In the meantime, firms should take a close look at the designation being used by the registered persons and ask questions if the requirements for obtaining or retaining the specific designation are not known to you. Firms should also pay attention to how such designations are being used by representatives, keeping in mind that they should not be used as a title or in a manner that appears to hold the rep out as having an expertise in an area not supported by his/her background or education. If you have questions about the model regulation or the use of designations, please contact Regulatory Compliance at 603-434-3594 and speak with Renee Hall (ext. 117) if you are an investment advisor compliance partner or with your BD Compliance Partners Account Manager – Beverly at ext 124 or Jane at ext. 122.
For the complete model rule go to www.nasaa.org/content/files/senior_model_rule_adopted.pdf