A guide to rules on electronic communications in the USA
| DOI | https://doi.org/10.1108/eb024938 |
| Date | 01 April 1997 |
| Pages | 291-298 |
| Published date | 01 April 1997 |
| Author | Wesley L. Ringo |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 5 Number 4
A guide to rules on electronic
communications in the USA
Wesley L. Ringo
Received (in revised form): 8th August, 1997
Piper Jaffray Inc., 222 South Ninth Street, Minneapolis, Minnesota
55042;
tel: (612) 342 5558;
fax: (612) 342 6295.
Wesley
L. Ringo is Managing Director and
the Director of Compliance at Piper Jaffray
Inc., a regional broker-dealer firm located
in Minneapolis, Minnesota. He was
for-
merly Commissioner of Securities for the
State of Wisconsin and prior to that he
served as Deputy Commissioner of Securi-
ties. He is currently a member of the Secu-
rities Industry Association's State
Regulatory Committee and is a member of
the Minnesota Securities Industry Associa-
tion's executive committee.
ABSTRACT
The New York Stock Exchange, Inc. (NYSE)
and the National Association of Securities
Dealers, Inc. (NASD) have proposed changes
to their rules regarding the supervision and
review of its member firms' supervision of
elec-
tronic communications.
The rule changes provide brokerage firms
with
more
flexibility by removing the require-
ment that firms review each and every item of
correspondence
between brokers and their clients
and,
instead,
require that firms establish reason-
able
procedures
for review of communications
with the public. The proposed changes will
allow brokerage firms to take advantage of the
many benefits and
efficiencies
offered by electro-
nic mail and Internet communication.
The paper offers a
practitioner's
guide on the
latest rulings regarding electronic communica-
tions from the Securities and Exchange Com-
mission (SEC), the NASD, the NYSE, the
North American Securities Administrators
Association and foreign
regulators.
This outline
covers virtually every Release issued on the
Internet in the USA and
abroad.
PROPOSED NYSE RULE CHANGES
REGARDING SUPERVISION OF CLIENT
COMMUNICATIONS
While experiencing some radical change
regarding the Internet, the New York
Stock Exchange (NYSE) has focused on
supervising electronic communication in
its latest proposal, which is still under
review.
Rule 342 (Offices, Approval Supervision
and Control)
According to the NYSE, there will be a
revision to Section 16 of the Supplemen-
tary Material that deletes the references to
'Patterns of Supervision' (1982). The revi-
sion states that pre-use review of outgoing
correspondence and having a supervisor
initial outgoing correspondence, as evi-
dence of his or her review, are appropriate
methods of supervision.
There will also be an amendment to s.16
that requires member firms to have reason-
able procedures for review of registered
representatives' communications with the
public regarding their business. Such poli-
cies and procedures should be in writing
and be designed to supervise reasonably
each registered representative.
Journal of Financial Regulation
and Compliance, Vol. 5, No. 4,
1997,
pp. 291-298
© Henry Stewart Publications.
1358-1983
Page 291
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