NASD
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Image:National association of securities dealers executive office.jpg
The NASD (formerly known as the National Association of Securities Dealers) is the primary Self Regulatory Organization (or SRO) responsible for the regulation of persons and companies involved in the securities industry in the United States. First and foremost it is an industry organization. Its board members almost exclusively represent securities firms. The NASD claims to enforce practices that are in the best interest of investors.
The U.S. Securities and Exchange Commission delegated enforcement responsibility to the NASD. All firms dealing in securities that are not regulated by another SRO, such as the Municipal Securities Rulemaking Board (MSRB), are required to be member firms of the NASD. Persons licensed to make securities transactions with the public are known as registered representatives, and are also registered with, and regulated by, the NASD.
The NASD has the power to take disciplinary actions (including fines and/or revocation of licenses) against member firms and registered representatives that they deem have broken these rules. To this end, the NASD is very valuable to the industry "Wall Street" in building the public trust (watchdog), thus safeguarding the individual investors.
The NASD is funded by assessments of member firms' registered representatives and applicants, annual fees paid by members, and by fines that it levies. The annual fee that each member pays includes a(n): basic membership fee; assessment based on gross income; fee for each principal and registered representative; and charge for each branch office.
One criticism is that the NASD has pursued relatively minor abuses, while the major problems related to the industry are largely ignored. Disciplinary actions are relatively rare and usually amount to a slap-on-the-wrist.
The NASD also operates the nation's largest arbitration forum for the resolution of disputes between customers and member firms, as well as between brokerage firm employees and their firms. Its arbitration forum excludes the most important pillars of the U.S. justice system. In particular, the NASD arbitration forum’s rules and procedures are fuzzy; its arbitrators are incompetent and corrupt and are beholden to the securities industry; it does not punish misconduct by the various parties; it is secret; law and precedent are ambiguous; and groundless decisions are virtually impossible to overturn. As a result decisions are almost always in favor of securities firms. Another benefit to the securities industry is that the proceedings are closed so the industry further hides its bad behavior from the public and regulators.