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Regulation and Compliance > Federal Regulation

NASD Proposes Annual Chief Compliance Officer Certifications

By Staff Writer

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NU Online News Service, June 4, 2003, 3:18 p.m. EDT – The National Association of Securities Dealers, New York, says it wants to give chief compliance officers at member firms more clout.

The NASD is proposing that it raise the status of chief compliance officers by requiring both the chief executive officer and the chief compliance officer of each member firm to jointly certify annually that the member firm has adequate compliance and supervisory policies and procedures in place.

Firms without chief compliance officers would have to name chief compliance officers to comply with the requirement, the NASD says.

The NASD is seeking comments on proposed rule amendments that would implement the requirement.

The NASD notes that it would need approval from the U.S. Securities and Exchange Commission to enforce a certification requirement.

The chief executive officer and chief compliance officer would be certifying the adequacy of the compliance and supervisory systems, but “not necessarily the implementation of that system in each instance,” the NASD says in a statement about the proposed requirement.

“The intent of this proposal is not to make the CEO and chief compliance officer personally liable for every compliance or supervisory failure a firm might experience,” the NASD says. “Rather, the proposal seeks to promote an enduring compliance culture within firms by elevating the status of the chief compliance officer and by compelling periodic and significant consultation between senior business and compliance personnel.”

The NASD has posted information about the proposal at //www.nasdr.com/pdf-text/0329ntm.pdf

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