NASD

National Association of Securities Dealers

A self-regulatory organization (SRO) in the United States that regulated the securities industry, overseeing broker-dealers and their registered representatives. The NASD existed from 1939 until 2007, when it merged with the regulatory arm of the New York Stock Exchange (NYSE) to form the Financial Industry Regulatory Authority (FINRA). Key points about the NASD:

1. Establishment: The NASD was founded in 1939 in response to the 1938 Maloney Act amendments to the Securities Exchange Act of 1934, which allowed for the creation of national securities associations to supervise the conduct of their members.
2. Purpose: The primary purpose of the NASD was to protect investors and maintain market integrity by regulating the activities of broker-dealers and their associated persons.
3. Responsibilities: The NASD’s main responsibilities included:
   • Establishing and enforcing rules and standards for its members related to business conduct and market integrity
   • Registering and educating industry participants
   • Examining member firms for compliance with NASD rules and federal securities laws
   • Investigating and disciplining members for violations of rules and regulations
4. NASDAQ: In 1971, the NASD created the National Association of Securities Dealers Automated Quotations (NASDAQ) stock market, which became the world’s first electronic stock market. NASDAQ eventually became a separate entity from the NASD in 2000.
5. Merger with NYSE Regulation: In 2007, the NASD merged with the regulatory arm of the NYSE to form FINRA, consolidating the regulation of broker-dealers under a single SRO.

Throughout its history, the NASD played a significant role in shaping the regulatory landscape of the U.S. securities industry and protecting investors by promoting fair and honest practices among its member firms.

• Abbreviation: NASD